EXHIBIT 4.08
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FEDERATED INVESTORS
7.96% Senior Secured Notes due 2006
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NOTE PURCHASE AGREEMENT
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Dated as of June 15, 1996
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[Exhibit 1.2(e) is a photocopy of the document as executed and delivered.
Exhibits 4.4(a) and 4.4(b) are photocopies of the opinions as delivered.]
Table of Contents
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Page
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1. AUTHORIZATION OF NOTES, ETC.................................... 1
1.1. The Notes............................................... 1
1.2. Security for the Notes; the Intercreditor
Agreement.............................................. 1
2. SALE AND PURCHASE OF NOTES..................................... 2
3. CLOSING........................................................ 2
4. CONDITIONS TO CLOSING.......................................... 3
4.1. Representations and Warranties.......................... 3
4.2. Performance; No Default................................. 3
4.3. Compliance Certificates................................. 3
4.4. Opinions of Counsel..................................... 3
4.5. Security Documents; Intercreditor Agreement............. 4
4.6. Purchase Permitted by Applicable Law, etc............... 4
4.7. Sale of Notes to Other Purchasers....................... 4
4.8. Payment of Special Counsel Fees......................... 4
4.9. Private Placement Number................................ 4
4.10. Changes in Corporate Structure.......................... 5
4.11. Proceedings and Documents............................... 5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 5
5.1. Organization; Power and Authority; Capital
Stock.................................................. 5
5.2. Authorization, etc...................................... 6
5.3. Disclosure.............................................. 6
5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates............................... 6
5.5. Financial Statements.................................... 7
5.6. Compliance with Laws, Other Instruments, etc............ 7
5 7. Governmental Authorizations, etc........................ 8
5.8 Litigation; Observance of Agreements, Statutes
and Orders............................................. 8
5.9. Taxes................................................... 9
5.10. Title to Property; Leases............................... 9
5.11. Licenses, Permits, etc.................................. 9
5.12. Compliance with ERISA................................... 10
5.13. Private Offering by the Company......................... 11
5.14. Use of Proceeds; Margin Regulations..................... 11
5.15. Existing Indebtedness; Future Liens..................... 12
5.16. Foreign Assets Control Regulations, etc................. 12
5.17. Status Under Certain Statutes........................... 12
5.18. Solvency................................................ 13
5.19. Environmental Matters................................... 13
5.20. Matters Relating to the Collateral...................... 14
6. REPRESENTATIONS OF THE PURCHASER............................... 15
6.1. Purchase for Investment................................. 15
6.2. Source of Funds......................................... 15
7. INFORMATION AS TO THE COMPANY.................................. 16
7.1. Financial and Business Information...................... 16
7.2 Officer's Certificate................................... 19
7.3. Inspection.............................................. 20
8. PREPAYMENT OF THE NOTES........................................ 21
8.1. Required Prepayments.................................... 21
8.2. Optional Prepayments.................................... 21
8.3. Notice of Prepayments................................... 21
8.4. Allocation of Partial Prepayments....................... 22
8.5. Maturity; Surrender, etc................................ 22
8.6. Purchase of Notes....................................... 22
8.7. Make-Whole Amount....................................... 23
9. AFFIRMATIVE COVENANTS.......................................... 24
9.1. Compliance with Law..................................... 24
9.2. Insurance............................................... 25
9.3. Maintenance of Properties............................... 25
9.4. Payment of Taxes and Claims............................. 25
9.5. Maintain Existence, Lines of Business, etc.............. 26
10. NEGATIVE COVENANTS............................................. 26
10.1. Priority Indebtedness.................................. 26
10.2. Liens.................................................. 27
10.3. Certain Financial Conditions........................... 29
10.4. Restricted Payments.................................... 29
10.5. Asset Sales............................................ 30
10.6. Merger, Consolidation, etc............................. 32
10.7. Change in Management................................... 33
10.8. Designation of Restricted and Unrestricted
Subsidiaries........................................... 33
10.9. Transactions with Affiliates........................... 34
11. EVENTS OF DEFAULT.............................................. 34
12. REMEDIES ON DEFAULT, ETC....................................... 37
12.1. Acceleration........................................... 37
12.2. Other Remedies......................................... 37
12.3. Rescission............................................. 38
12.4. No Waivers or Election of Remedies, Expenses,
etc.................................................... 38
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.................. 38
13.1. Registration of Notes.................................. 38
13.2. Transfer and Exchange of Notes......................... 39
13.3. Replacement of Notes................................... 39
14. PAYMENTS ON NOTES.............................................. 40
14.1. Place of Payment....................................... 40
14.2. Home Office Payment.................................... 40
15. EXPENSES, ETC.................................................. 41
15.1. Transaction Expenses................................... 41
15.2. Survival............................................... 42
(ii)
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ENTIRE
AGREEMENT......................................................... 42
17. AMENDMENT AND WAIVER............................................... 42
17.1. Requirements............................................ 42
17.2. Solicitation of Holders of Notes........................ 43
17.3. Binding Effect, etc..................................... 43
17.4 Noted Held by the Company, etc.......................... 44
18. NOTICES............................................................ 44
19. REPRODUCTION OF DOCUMENTS.......................................... 44
20. CONFIDENTIAL INFORMATION........................................... 45
21. SUBSTITUTION OF PURCHASER.......................................... 46
22. MISCELLANEOUS...................................................... 46
22.1. Successors and Assigns.................................. 46
22.2. Construction............................................ 46
22.3. Jurisdiction and Process; Waiver of Jury Trial.......... 47
22.4. Payments Due on Non-Business Days....................... 48
22.5. Severability............................................ 48
22.6. Accounting Terms........................................ 48
22.7. Counterparts............................................ 48
22.8. Governing Law........................................... 48
22.9. Limitation of Liability................................. 49
Schedule A - - Names and Addresses of Purchasers
Schedule B - - Defined Terms
Exhibit 1.1 - - Form of 7.96% Senior Secured Note due 2006
Exhibit 1.2(a) - - List of Security Documents
Exhibit 1.2(b) - - Form of Pledge Agreement
Exhibit 1.2(c) - - Form of Security Agreement
Exhibit 1.2 (d) - - Form of Intercompany Subordination Agreement
Exhibit 1.2(e) - - Form of Intercreditor Agreement
Exhibit 4.4(a) - - Form of Opinion of Counsel for the
Company, the Grantors and the Pledgors
Exhibit 4.4(b) - - Form of Opinion of Special Counsel for the Purchasers
Schedule 5.1 - - Capital Stock
Schedule 5.4 - - Subsidiaries
Schedule 5.5 - - Financial Statements
Schedule 5.9 - - Taxes
Schedule 5.15 - - Existing Indebtedness and Liens
(iii)
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
New York, New York
As of June 15, 1996
TO THE PURCHASER LISTED IN THE
ATTACHED SCHEDULE A WHICH
IS A SIGNATORY HERETO:
Ladies and Gentlemen:
FEDERATED INVESTORS a Delaware business trust (the "COMPANY), agrees
with you as follows:
1. AUTHORIZATION OF NOTES, ETC.
1.1. THE NOTES.
The Company has duly authorized the issue and sale of $98,000,000
aggregate principal amount of its 7.96% Senior Secured Notes due 2006 (the
"NOTES"), each such note to be substantially in the form set out in Exhibit 1.1.
As used herein, the term "NOTES" means all notes originally delivered pursuant
to this Agreement and the Other Agreements referred to below and all notes
delivered in substitution or exchange for any such note and, where applicable,
shall include the singular number as well as the plural. Certain capitalized and
other terms used in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified to a Schedule or an
Exhibit attached to this Agreement.
1.2. SECURITY FOR THE NOTES; THE INTERCREDITOR AGREEMENT.
The Notes will be secured, equally and ratably with the obligations of
the Company under the Existing Bank Credit Facility, by the Security Documents
described in Exhibit 1.2(a), which in the case of the Pledge Agreement, the
Security Agreement and the Intercompany Subordination Agreement shall be
substantially in the respective forms of Exhibits 1.2(b), 1.2(c) and 1.2 (d) .
An Intercreditor and Collateral Agency Agreement substantially in the form of
Exhibit 1.2(e) (the "INTERCREDITOR AGREEMENT"), among the Purchasers, the Credit
Facility Banks, PNC Bank, National Association, as agent for said Banks (the
"Agent") , and PNC Bank, National Association, as Collateral Agent (the
"Collateral Agent"), shall govern (i) the respective rights of the holders of
the Notes and the Credit Facility Banks against the Collateral in respect of
Indebtedness of the Company and (ii) the respective RIGHTS of the holders of the
Notes and the Credit
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Facility Banks against any other assets of the Company in respect of
Indebtedness of the Company (including without limitation the Notes).
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes in the principal amount specified
opposite your name in Schedule A at the purchase price of 100% of the principal
amount thereof. Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "Other Agreements")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), providing for the sale at such Closing to
each of the Other Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder and the obligations of the
Other Purchasers under the Other Agreements are several and not joint
obligations and you shall have no obligation under any Other Agreement and no
liability to any Person for the performance or non-performance by any Other
Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, One
Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ at a closing (the
"Closing") on June 27, 1996 or on such other Business Day thereafter as may be
agreed upon by the Company and you and the Other Purchasers. At the Closing the
Company will deliver to you the Notes to be purchased by you IN the form of a
single Note (or such greater number of Notes in denominations of at least
$500,000 as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price thereof or BY wire transfer of immediately available funds for
the account of the Company to account number ▇▇▇▇▇▇▇ at PNC Bank, National
Association, ABA No. ▇▇▇▇▇▇▇▇▇.
If at the Closing the Company shall fail to tender such Notes to YOU
AS PROVIDED ABOVE IN THIS SECTION 3, OR ANY OF THE conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
NONFULFILLMENT.
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4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, Prior to or at
the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be Performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Section 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall ▇▇▇▇ entered into any
transaction since December 31, 1995 that would have been prohibited by any of
Sections 10.1 to 10.6, inclusive, had such Sections applied since such date.
4.3. COMPLIANCE CERTIFICATES.
(a) Officers Certificate. The Company shall have delivered to you an
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Officers Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.10 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you
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a certificate of the Secretary or an Assistant Secretary of the Company,
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the Notes,
this Agreement, the Other Agreements and the other documents contemplated by
this Agreement and the Other Agreements.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing, from (a) ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP,
counsel for the Company, the Pledgors and the Grantors, substantially in the
form set forth in Exhibit 4.4(a) (and the Company hereby instructs such counsel
to deliver such opinion to you), and (b) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, your special
counsel in connection with the transactions contemplated hereby, substantially
in the form set forth in Exhibit 4.4 (b). Each such opinion shall also cover
such other matters incident to such transactions as you may reasonably request.
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4.5. SECURITY DOCUMENTS; INTERCREDITOR AGREEMENT.
Each of the Security Documents and the Intercreditor Agreement shall
have been duly executed and delivered in the respective forms hereinabove
recited and shall be in full force and effect; certificates evidencing all of
the Pledged Collateral, together with the Proxies and appropriate blank stock
powers, shall have been duly delivered to the Collateral Agent; and the Agent
shall confirm to you and the Collateral Agent that it will not exercise its
rights under the Proxies (which may not be assignable to the Collateral Agent)
other than in accordance with the Intercreditor Agreement.
4.6. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing, your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405 (a) (8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including without limitation
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you at least two days prior to the date of the
Closing, you shall have received an Officers Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
4.7. SALE OF NOTES TO OTHER PURCHASERS.
The Company shall sell to the Other Purchasers and the Other
Purchasers shall purchase the Notes to be purchased by them at the Closing as
specified in Schedule A.
4.8. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the reasonable fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the extent
reflected in the statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
4.9. PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
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4.10. CHANGES IN CORPORATE STRUCTURE.
The Company shall not have changed its jurisdiction of organization or
been a party to any merger or consolidation and shall not have succeeded to all
or any substantial part of the liabilities of any other entity at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.
4.11. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY; CAPITAL STOCK.
The Company is a business trust duly organized, validly existing and
in good standing under the laws of the State of Delaware, and is duly qualified
to do business and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
Company has the lawful power and authority to own or hold under lease the
PROPERTIES it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement, the
Other Agreements, the Notes and the other documents to be executed and delivered
by it as contemplated by this Agreement and the Other Agreements and to perform
the provisions hereof and thereof.
The authorized capital stock and other equity interests of the Company
consists of three CLASSES OF PREFERRED STOCK, NONE of which is issued and
outstanding, 99,000 class A Shares, of which 1,000 class A shares are issued and
outstanding, and 149,700,000 class B Shares, of which 13,994,000 Class B Shares
are issued and outstanding and 6,487,758 Class B Shares are held as treasury
stock. All of such issued and outstanding common shares are validly issued,
fully paid and nonassessable. All of such outstanding Class A Shares are owned
beneficially and of record by Management Shareholders and Management-Related
Shareholders as set forth in Schedule 5.1. Except as described in Schedule 5.1,
the Company does not have any outstanding securities convertible into or
exchangeable for any shares of its capital stock.
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5.2. AUTHORIZATION, ETC.
This Agreement, the Other Agreements, the Notes and the Security
Documents to which the Company is a party have been duly authorized by all
necessary action on the part of the Company, and this Agreement and such
Security Documents constitute, and upon execution and delivery thereof each Note
will constitute, legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms. Each Security
Document required to be delivered by a Subsidiary on the date of the Closing has
been duly authorized by all necessary corporate and shareholder action on the
part of the respective Subsidiary and, upon execution and delivery thereof as
hereinabove provided, will constitute a legal, valid and binding obligation of
such Subsidiary enforceable against such Subsidiary in accordance with its
terms.
5.3. DISCLOSURE.
The Company, through its agent PNC Capital Markets, has delivered to
you a copy of a Confidential Information Memorandum dated April 1996 (the
"MEMORANDUM"), relating to the transactions contemplated hereby. The Memorandum
fairly describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. This Agreement,
the Memorandum, the documents, certificates or other writings delivered to you
by or on behalf of the Company in connection with the transactions contemplated
hereby (together with the Memorandum, the "DISCLOSURE DOCUMENTS"), and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Since December 31, 1995, there has
been no change in the financial condition, operations, business, properties or
prospects of- the Company or any Subsidiary except as disclosed in the
Disclosure Documents and other changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) Schedule 5.4 contains (EXCEPT AS NOTED THEREIN) complete and
correct lists of the Company's (i) Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii)
Affiliates, other than Subsidiaries, and (iii) directors and
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senior officers. Each Subsidiary listed in Schedule 5.4 is a Restricted
Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests Of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the lawful power and authority to own
or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
in Schedule 5.4 and customary limitations imposed by corporate law statutes and
applicable SEC regulations) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary. No Subsidiary is a
guarantor of any Indebtedness of the Company.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to you copies of the financial statements of
the Company and its Subsidiaries listed in Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company Of this
Agreement, the Notes and the Security Documents to when
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it is a party and by the other Grantors of the respective Security Documents to
which they are party, will not (I) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any Property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, declaration of trust,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (ii) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary, except that foreclosure
on the Pledged Collateral or other transfer of the Pledged Collateral under the
Pledge Agreement without obtaining the approvals described in Section 9(b) of
the Pledge Agreement may result in the termination of contracts under the
Investment Company Act.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required for the validity of the
execution, delivery or performance by the Company of this Agreement, the Notes
or any Security Documents to which it is a party, except that foreclosure on the
Pledged Collateral or other transfer of the Pledged Collateral under the Pledge
Agreement may necessitate obtaining the approvals described in Section 9(b) of
the Pledge Agreement.
5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND
ORDERS.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably BE EXPECTED TO have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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5.9. TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) currently payable without
penalty or interest, (b) the amount of which is not individually or in the
aggregate Material or (c) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. Except as set forth on
Schedule 5.9, the Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income TAX liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service for all fiscal years up to and
including the fiscal year ended December 31, 1990.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
listed on Schedule 5.5 OR purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. Neither the Company nor any of its Subsidiaries owns any real
property; the only interests in real property that any of them hold are leases
as lessee of office space, data processing space and storage space for documents
and files. All such leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11. LICENSES, PERMITS, ETC.
(a) The Company and Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks, trade names and proprietary software, or rights thereto, that
individually or in the aggregate are Material, free and clear of any Liens and
without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the Company
or any Subsidiary infringes in any Material
10
respect any license, permit, franchise, authorization, patent, copyright,
service ▇▇▇▇, trademark, trade name, Proprietary software or other right owned
by any ocher Person.
(c) To the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service ▇▇▇▇, trademark, trade name,
proprietary software or other right owned or used by the Company or any of its
Subsidiaries.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a) (29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plans most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plans most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "BENEFIT LIABILITIES" has the
meaning specified in section 4001 of ERISA and the terms "CURRENT VALUE" and
"PRESENT VALUE" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities
11
attributable to continuation coverage mandated by section 4980B of the Code) of
the Company and its Subsidiaries is not Material.
(e) With respect to each employee benefit plan, if any, disclosed by
you in writing to the Company in accordance with Section 6.2(c), neither the
Company nor any "affiliate" of the Company (as defined in Section V(c) of the
QPAM Exemption) has at this time, nor has exercised at any time during the
immediately preceding year, the authority to appoint or terminate the "QPAM""
(as defined in Part V of the QPAM Exemption) disclosed by you to the Company
pursuant to Section 6.2(c) as manager of any of the assets of any such plan or
to negotiate the terms of any management agreement with such QPAN on behalf of
any such plan, and the Company is not an "affiliate" (as so defined) of such
QPAM. The Company Is not a party in interest with respect to any employee
benefit plan disclosed by you in accordance with Section 6.2(b) or 6.2(e). The
execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any prohibited transaction (as such term is defined
in section 406(a) of ERISA and section 4975(c) (1) (A)-(D) of the Code) that
could subject the Company or any holder of a Note to any tax or penalty on
prohibited transactions imposed under said section 4975 of the Code or by
section 502(i) of ERISA. The representation by the Company in the preceding
sentence of this Section 5.12(e) is made in reliance upon and subject to the
accuracy of your representation in Section 6.2 as to the sources of the funds
used to pay the purchase price of the Notes to be purchased by you.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated In respect thereof with,
any person other than you, the Other Purchasers and not more than 15 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds OF THE SALE OF THE Notes to repay
existing senior and subordinated Indebtedness. No part of the proceeds from the
sale of the Notes hereunder will be used, and (except for possible start-up and
other investments in Funds In accordance with ordinary business operations) no
part of the proceeds of such Indebtedness was used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation G of the Board of Governors of the Federal Reserve System (12 CFR
207), or for the purpose of buying or carrying or trading in any securities
under
12
such circumstances as to involve the Company in a violation of Regulation X of
said Board (12 CFR 224) or to involve any broker OR dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock constitutes less than 10%
of the value of the assets of the Company and its Subsidiaries, as determined by
any reasonable method, and the Company does not have any present intention that
margin stock will constitute more than 25% of the value of such assets as so
determined. As used in this Section, the terms "MARGIN STOCK" AND "PURPOSE OF
BUYING OR CARRYING" shall have the meanings assigned to them in said Regulation
G.
5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of June 15,
1996, since which date there has been no Material change in the amounts,
interest rates, sinking funds, installment payments or maturities of the
Indebtedness of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default, and no waiver of default is currently in effect, in
the payment or any principal or interest on any Indebtedness of the Company or
such Subsidiary, and no event or condition exists with respect to any such
Indebtedness of the Company or any Subsidiary that would permit (or that with
the giving of notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, no Indebtedness of the
Company or any Subsidiary is subject to any Lien and neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. STATUS UNDER CERTAIN STATUTES.
(a) Neither the Company nor any Subsidiary is subject to regulation
under the Public Utility Holding Company Act of 19B5, as amended, the Interstate
Commerce Act, as amended, or the Federal Power Act, as amended, or an
"investment company" or company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940 as amended (the "INVESTMENT
COMPANY ACT"). Each Fund that constitutes an
13
"investment company" is in compliance in all material respects with or
requirements applicable to an "investment company" under the Investment Company
Act.
(b) The Company is not required to register under or otherwise
subject to the requirements of the Investment Advisers Act of 1940, as amended
(the "Investment ADVISERS ACT") . Schedule 5.4 identifies the Subsidiaries that
are subject to the requirements of the Investment Advisers Act, and each such
Subsidiary is duly registered under and in compliance with said Act. The Company
is not prohibited by the Investment Advisers Act or the Investment Company Act,
or the rules or regulations under either of such Acts, from performing its
obligations under any advisory agreement to which it is a party.
(c) Except for periodic inspection reports from the regional office
of the SEC which have addressed various matters which are not Material, neither
the Company nor any Subsidiary has since August 1, 1989 received any
correspondence from the SEC relating to compliance with federal securities laws.
No Person is serving or acting as an officer, director or investment adviser of
the Company except in accordance with the provisions of the Investment Company
Act and the Investment Advisers Act and the rules and regulations of the SEC
under such Acts.
5.18. SOLVENCY.
The Company is, and after giving effect to the issuance of the
Notes on the date of the Closing will be, a "solvent institution", as said term
is used in Section 1405(c) of the New York Insurance Law, whose "obligations. .
. are not in default as to principal or interest", as said terms are used in
said Section 1405 (c)
5.19. ENVIRONMENTAL MATTERS.
(a) Neither Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violations of
any Environmental Laws.
(b) Neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use.
(c) Neither the Company nor any Subsidiary has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them and has not disposed of any
14
Hazardous Materials in a manner contrary to any Environmental Laws.
(d) To the knowledge of the Company, all buildings on all real
properties now leased or operated by the Company or any Subsidiary are in
substantial compliance with applicable Environmental Laws .
5.20. MATTERS RELATING TO THE COLLATERAL.
The Liens created in favor of the Collateral Agent pursuant to the
Security Documents in respect of the Collateral constitute and will constitute
first priority perfected security interests under the Uniform Commercial Code
as in effect in each applicable jurisdiction, entitled to all rights, benefits
and priority Cs provided by such Uniform Commercial Code or other applicable
jaw; and the granting of such Liens does not and will not impair or cause the
termination of any investment advisory or other contact of the Company or any
of its Subsidiaries under the Investment Company Act or any other applicable
law. Upon the filing of financing statements relating to such security
interests in each office and in each jurisdiction where required in order to
perfect the security interests described above, taking possession of any stock
certificates evidencing the Pledged Collateral and recordations of the Security
Agreements in the United States Patent and Trademark Office, all such action as
is necessary or advisable to establish such rights of the Collateral Agent will
have been taken. There will be upon execution and delivery of the Security
Agreement and the Pledge Agreement and such filings and such taking of
possession referred to in the preceding sentence, no necessity for any further
action in order to preserve, protect and continue such rights, except the
filing of continuation statements with respect to such financing statements
within six months prior to each five year anniversary of the filing of such
financing statements, provided that foreclosure on the Pledged Collateral or
other transfer of the Pledged Collateral under the Pledge Agreement may
necessitate obtaining one approvals described in Section 9(b) of the Pledge
AGREEMENT.
The Pledged Collateral is sufficient to give the Collateral Agent on
behalf of the holders from time to time of the Notes and the Credit Facility
Banks, after the occurrence of an Event of Default, full voting control of the
Company and its Restricted Subsidiaries except as to matters in respect of which
holders of Class B Shares have voting rights pursuant to the Declarations of
Trust; and the Proxies are sufficient to give the Agent full voting control of
such Class B Shares as a class.
15
6. REPRESENTATIONS OF THE PURCHASER.
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of
one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of your or their property shall at all
times be within your or their control. You understand that the Notes have
not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2. SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account", as such
term is defined in Prohibited Transactions Exemption (""PTE"") 95-60
(issued July 12, 1995), and the purchase of the Notes by you is eligible
for, and satisfies the requirements of, the exemption provided in Section
I of PTE 95-60 as in effect as of the date of this Agreement; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-I (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or group
of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
PROFESSIONAL ASSET MANAGER" OR "QPAM" (within the meaning of PART V OF THE
QPAM EXEMPTIONS), no employee benefit PLANS ASSETS THAT ARE INCLUDED in
SUCH investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c) (1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part 1(c) and (g) of the QPAM Exemption are
16
satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit PLANS, or a separate
account or trust fund comprising one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used IN this Section 6.2, the TERMS "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings assigned to
SUCH TERMS in section 3 of ERISA.
7. INFORMATION AS TO THE COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes:
(a) Quarterly Statements - AS SOON AS AVAILABLE AND IN ANY event
--------------------
within 45 days after the end of each quarterly fiscal period in each fiscal
year of the Company (other than the last quarterly fiscal period of each
such fiscal year), duplicate copies of
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of such quarter, and
(ii) CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS EQUITY
AND CASH FLOWS OF THE COMPANY and its Restricted Subsidiaries for such
quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the consolidated figures for
the corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial Officer
as fairly presenting, in all material respects, the financial position of
the companies being reported on and
17
their results of operations and cash flows, subject to changes resulting
from year-end adjustments;
(b) Annual Statements -- as soon as available and in any event within
-----------------
120 days after the end of each fiscal year of the Company, duplicate
copies of
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of such year,
(ii) consolidated statements of income, shareholders equity
and cash flows of the Company and its Restricted Subsidiaries for such
year, and
(iii) if available other than pursuant to requirements of this
Agreement, a consolidating balance sheet of the Company and its
Restricted Subsidiaries as of the end of such year and the related
consolidating statements of income, shareholders equity and cash flows
of the Company and its Restricted Subsidiaries for such year,
setting forth in each case in comparative form the consolidated figures for
the previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent public accountants of
recognized national standing, which shall (x) state that such
consolidated financial statements present fairly , in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, that the examination of such accountants in
connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the
circumstances and (y) be free of qualifications (other than any
qualifications relating to consistency, or relating to any
inconsistency with GAAP, that may result from a change in the method
used to prepare such financial statements and as to which such
accountants concur), and
(B) a certificate of such accountants stating further
whether, in making their audit, they have become aware of the
existence of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event then exists,
specifying the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly or
indirectly, for any failure to
18
obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an audit
in accordance with generally accepted auditing standards or did not
make such an audit)
(c) SEC and Other Reports -- promptly upon their becoming available,
---------------------
one copy of (i) each financial statement or report, notice, proxy statement
or press release sent by the Company or any Subsidiary to the Credit
Facility Banks or the banks or other financial institutions party to any
New Credit Facility or generally to its non-management shareholders (other
than the Company or a Subsidiary) or its other creditors, and (ii) each
regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder) and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the SEC;
(d) Notice of Default or Event of Default -- promptly, and in any
-------------------------------------
EVENT within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or under the Existing Bank Credit Facility or that any Person has given any
notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), A written notice specifying the nature and
period of existence thereof and what action the Company is taking or
proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
-------------
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action , if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable EVENT, as defined
in section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
of its ERISA Affiliates of a notice from a Multiemployer Plan that
such action has been taken by the PEGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the
19
Company or any of its ERISA Affiliates pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any of the
rights , properties or assets of the Company or any such ERISA
Affiliate pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
-----------------------------------
within five days of receipt thereof, copies of any notice to the Company
or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect (which in
any event shall include any notice as to the existence 0:, or as to any
facts or circumstances that might reasonably be expected to lead to, a
proceeding that could adversely affect the registration or good standing of
the Company or any Subsidiary with the SEC);
(g) Accountants Letters and Audits -- promptly, and in any event
-------------------------------
within five days after receipt thereof by a Responsible Officer, one copy
of each report as to material inadequacies in accounting controls submitted
by independent accountants in connections with any audit of the Company or
any of its Subsidiaries or any interim or special audit of the Company or
any of its Subsidiaries; and
(h) Requested Information -- with reasonable promptness, such other
data and information to the relating business, operations, affairs,
financial condition, assets or properties or the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes and the Security Documents to
which it is a party as from time to time may be reasonably requested by
such holder of Notes, provided that the Company shall not be required to
deliver any such information to a Competitor if the Company determines in
good faith that such information is of a competitive or sensitive nature.
The Company shall deliver, with reasonable promptness after a written
request therefor by any holder of a Note or a prospective transferee of a Note,
information satisfying the requirements of subsection (d) (4) (i) of Rule 144A
of the SEC or any similar rule then in effect.
7.2. OFFICERS CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be
20
accompanied by a certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
-------------------
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 to 10.6, inclusive,
during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount ratio or
percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then in
existence); and
(b) Default -- a statement that such Senior Financial Officer has
-------
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervisions, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly
or annual period covered by the statements then being furnished to the
date of the certificate and that such review shall not have period
disclosed the existence during such of any condition or event that
constitutes a Default or an Event of Default or, if any such condition or
event existed or exists (including without limitation any such event or
conditions resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes
to take with respect thereto.
7.3. INSPECTION.
The Company shall permit the representatives of each holder of
Notes that is an Institutional Investor (except that no Competitor shall be
entitled to exercise rights under clause (a) below):
(a) No Default -- if no Default or Event of Default then EXISTS, AT
----------
THE EXPENSE of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
-------
expense of the Company to visit and inspect any of the offices or
properties of the Company or any
21
Subsidiary, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances ant accounts with their
respective officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all at such
times and as often as may be requested.
8. PREPAYMENT OF THE NOTES.
In addition to the payment of the entire unpaid principal amount of
the Notes at the final maturity thereof, the Company will make required, and
may make optional, prepayments in respect of the Notes, all as hereinafter
provided.
8.1. REQUIRED PREPAYMENTS.
On June 27, 2000 and each June 27 thereafter to and including June
27, 2005, the Company will prepay $14,000,000 principal amount (or such lesser
principal amount as shall then be outstanding) of the Notes, such prepayment
to be made at the principal amount to be prepaid, together with accrued
interest thereon to the date of such prepayment, without premium and allocated
as provided in Section 8.4, provided that upon any partial prepayment of the
Notes pursuant to Section 8.2 or 10.5(d) the principal amount of each required
prepayment of the Notes becoming due under this Section 8.1 on and after the
date of such prepayment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as a result of such
prepayment.
8.2. OPTIONAL PREPAYMENTS
The Company may, at its option and upon notice as provided in
Section 8.3, prepay at any time all, or from time to time any part of, the
Notes (but, if in part, then in a minimum amount of $5,000,000 and otherwise in
multiples of $100,000) at the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
8.3. NOTICE OF PREPAYMENTS
The Company will give each holder of Notes written notice of each
optional prepayment under Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall
specify the date fixed for such prepayment (which shall be a Business Day) ,
the aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.4) and the
22
interest to be paid on the prepayment date with respect to such principal amount
being prepaid.
Each such notice of prepayment shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment) , setting forth the details of such
computations. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date. If for any reason any holder of the Notes, by notice to
the Company, objects to such calculation of the Make-Whole Amount for such
Notes, the Make-Whole Amount for such Notes calculated by such holder and
specified in such notice shall be final and binding upon the Company and the
holders of such Notes absent manifest error. If any such holder of a Note
shall give the notice specified in the preceding sentence , the Company will
forthwith provide copies of such notice to all other holders of outstanding
Notes.
8.4. ALLOCATION OF PARTIAL PREPAYMENTS
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof.
8.5. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-
Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall thereafter be
surrendered to the Company and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note .
8.6. PURCHASE OF NOTES.
The Company will not, and will not permit any Affiliate to, purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel (or will cause to be promptly canceled) all Notes acquired by
it or any Affiliate in connection with any payment, prepayment or
23
purchase of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange or any such Notes .
8.7. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note cover the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or 10.5 or has
become or is declared to be immediately due and payable pursuant to Section
12.1, as the context requires
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time, on the third Business Day
preceding the Settlement Date with respect to such Called Principal, on
the display designated as "Page 678" on the Telerate Access Service (or
such other display as may replace Page 678 on Telerate Access Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date,
or (ii) if such yields are not reported as of such time or the Yields
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such Yields
have been so reported as of the third Business Day preceding the Settlement
Date with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date. Such implied yield will be determined, if necessary, by (a)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the
24
actively traded U.S. Treasury security with a maturity closest to and
greater than the Remaining Average Life and (2) the actively traded U.S.
Treasury security with a maturity closest to and less than the Remaining
Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2, 10.5
or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or 10.5 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding
(and without limiting specific obligations of the Company or any Subsidiary
under any Security Document):
9.1. COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including without limitation Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
25
maintains in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-
insurance and self-insurance, if adequate reserves are maintained with respect
thereto) as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
9.3. MAINTENANCE OF PROPERTIES.
Subject to Sections 10.5 and 10.6, the Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that
such discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claim if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary and (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
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9.5. MAINTAIN EXISTENCE, LINES OF BUSINESS, ETC.
Subject to Section 10.5, the Company will at all times preserve and
keep in full force and effect its existence as a business trust or other legal
entity. Subject to Sections 10.5 and 10.6, the Company will at all times
preserve and keep in full force and effect the corporate existence (or existence
as another legal entity) of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate or
other existence, right or franchise could not, individually or in the aggregate,
have a Material Adverse Effect.
The Company and its Subsidiaries will at all times continue to engage
in their respective businesses substantially as conducted and operated by them
as of the date of this Agreement (i.e., mutual fund investment advisory,
insurance, retirement plan services and financial services business and the
business of Federated Bank), and without any material change, either directly
or indirectly, in the businesses conducted and operated by them as a whole.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. PRIORITY INDEBTEDNESS.
The Company will not permit the sum (without duplication) of (a) the
aggregate unpaid principal amount of Indebtedness (including Capitalized Lease
Obligations) of the Company secured by Liens permitted by Sections 10.2(i) plus
(b) the aggregate unpaid principal amount of Indebtedness of all Restricted
Subsidiaries (other than unsecured Indebtedness owing to the Company or a
Wholly-Owned Restricted Subsidiary) to exceed the greater of (i) 50% of
Consolidated Cash Flow for the period of four fiscal quarters then most recently
ended and (ii) $25,000,000.
For purposes of this Section 10.1, (A) a Restricted Subsidiary shall
be deemed to have incurred Indebtedness in respect of any obligation previously
owed to the Company or to a Wholly-Owned Restricted Subsidiary on the date the
obligee ceases for any reason to be the Company or a Wholly-Owned Restricted
Subsidiary and (B) a Person that hereafter becomes a Restricted Subsidiary shall
be deemed at that time to have incurred all of its outstanding Indebtedness.
27
10.2. LIENS.
The Company will not and will not permit any Restricted Subsidiary to
create, assume, incur or suffer to exist any Lien upon or with respect to any
property or assets, whether now owned or hereafter acquired, provided that
nothing in this Section 10.2 shall prohibit:
(a) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;
(b) pledges or deposits made in the ordinary course of business to
secure payment of worker's compensation, or to participate in any fund in
connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(c) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable and Liens of landlords securing
obligations to pay lease payments that are not yet due and payable or in
default;
(d) good-faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in the
ordinary course of business (but not involving judgements) and (ii) Liens
granted to surety companies or to financial institutions to secure standby
letters of credit issued by such institutions to surety companies as an
inducement for such surety companies to issue or maintain existing surety,
appeal, indemnity, performance or other similar bonds required in the
ordinary course of business (but not involving judgments);
(e) Liens consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs
the use of such property or the value thereof, and none of which is
violated in any material respect by existing or proposed structures or
land use;
(f) Liens in favor of the holders of the Notes;
(g) Liens existing on the date of this Agreement and described on
Schedule 5.15, provided that the principal amount secured by any such Lien
as of the date of the Closing is not increased and no additional assets
become subject to any such Lien;
28
(h) the following (none of which may affect the Collateral and so
long as all of which in the aggregate could not reasonably be expected to
have a Material Adverse Effect):
(i) claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the Company
maintains such reserves or other appropriate provisions as shall be
required by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose any such
Lien;
(ii) claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including any
attachment of personal or real property or other legal process prior
to adjudication of a dispute on the merits;
(iii) claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory consensual Liens; or
(iv) Liens of governmental entities arising under federal or
state Environmental Laws;
and provided further that in any such case (1) the validity or amount of
any thereof is being contested in good faith by appropriate and lawful
proceedings diligently conducted so long as levy and execution thereon have
been stayed and continue to be stayed or (2) if a final judgment is entered
in respect of any thereof and such judgment is discharged within 30 days of
entry; and
(i) Liens which would otherwise not be permitted by clauses (a)
through (h) above, securing Indebtedness of the Company or a Restricted
Subsidiary, provided that the Company will not permit the sum (without
duplication) of (i) the aggregate unpaid principal amount of Indebtedness
(including Capitalized Lease Obligations) of the Company secured by all
such Liens not permitted by clauses (a) through (h) above plus (ii) the
aggregate unpaid principal amount of Indebtedness of all Restricted
Subsidiaries (other than unsecured Indebtedness owing to the Company or a
Wholly-Owned Restricted Subsidiary) to exceed the greater of (i) 50% of
Consolidated Cash Flow for the period of four fiscal quarters then most
recently ended and (ii) $25,000,000.
For purposes of this Section 10.2 any Lien existing in respect of property at
the time such property is acquired or in respect of property of a Person at the
time such Person is acquired, consolidated or merged with or into the Company or
a Restricted Subsidiary shall be deemed to have been created at that time.
29
10.3. CERTAIN FINANCIAL CONDITIONS.
The Company will not permit
(a) Fixed Charge Coverage Ratio -- the ratio of Consolidated Earnings
---------------------------
Available for Fixed Charges to Consolidated Fixed Charges as of the end
of any fiscal quarter for the four fiscal quarters then ended to be less
than 2.0 to 1.0, or
(b) Debt Service and Dividend Coverage Ratio -- the ratio of
----------------------------------------
Consolidated Earnings Available for Debt Service and Dividends to
Principal and Dividend Payments as of the end of any fiscal quarter for
the four fiscal quarters then ended to be less than 1.0 to 1.0, or
(c) Leverage Ratio -- the ratio of Consolidated Indebtedness as of
--------------
any date to Consolidated Cash Flow for the four fiscal quarters then most
recently ended to exceed the ratio set forth below during the periods
specified below (including without limitation on a pro forma basis as
described below):
Period Ratio
------ -----
Fiscal Years 1996-2000 4.0 to 1.0
Fiscal Year 2001 and thereafter 3.0 to 1.0
For purposes of clause (c) above (i) Indebtedness under securities clearing
arrangements entered into in the ordinary course of business and secured by
marketable securities and related cash balances with customary loan-to-value
ratio shall be excluded from Consolidated Indebtedness, and (ii) Consolidated
Indebtedness and Consolidated Cash Flow shall be determined on a pro forma
basis in accordance with GAAP after giving effect to all material acquisitions
and material dispositions made during the period with respect to which any
computation is being made as if such acquisitions and dispositions were made on
the first day of such period; and for such purpose a "material acquisition" or
"material disposition" shall be deemed to include any transaction or series of
related transactions having an aggregate purchase price of at least $20,000,000.
10.4. RESTRICTED PAYMENTS.
The Company will not, directly or indirectly, make or declare any
Restricted Payment unless
(a) after giving effect to any such action, the aggregate amount of
all Restricted Payments made during the period from January 1, 1996 to and
including the date of such action (the "COMPUTATION PERIOD") would not
exceed the sum of $5,000,000 plus 50% (or minus 100% in the case of a
30
deficit) of Consolidated Adjusted Net Income for the Computation Period,
and
(b) after giving effect to any such action, no Default or Event of
Default shall have occurred and be continuing.
The Company will not declare any Restricted Payment that is payable
more than 60 days after the date of declaration or permit any Subsidiary to
make any Restricted Payment. Notwithstanding the limitations of clause (a)
above, (x) no payment made to Aetna Life Insurance Company or any of its
affiliates prior to the date of this Agreement or stock redemption in
connection therewith prior to the date of this Agreement, in each case in
connection with the Repurchase described in the Disclosure Documents, shall be
deemed to constitute a Restricted Payment and (y) the Company may from time to
time from the date of the Closing until payment in full of all outstanding
Notes repurchase Class B Shares issued in accordance with the Federated
Investors Employees Restricted Stock Plan for an aggregate amount not to exceed
$1,000,000, and no such repurchase shall be deemed to constitute a Restricted
Payment.
10.5. ASSET SALES.
The Company will not and will not permit any Restricted Subsidiary
to, directly or indirectly, make any sale, transfer, lease (as lessor) , loan or
other disposition of any property or assets (an "ASSET SALE") other than
(a) Asset Sales permitted by Sections 10.6;
(b) Asset Sales in the ordinary course of business;
(c) Asset Sales by a Wholly-Owned Restricted Subsidiary (other than
an Insurance Subsidiary) to any other Wholly-Owned Restricted Subsidiary
(other than an Insurance Subsidiary);
(d) Asset Sales for cash of Designated Assets by a Restricted
Subsidiary to a Special Purpose Subsidiary in connection with a
securitization or other receivables sale transaction, provided in each case
that
(i) such Asset Sale is properly (in accordance with GAAP), and
is, accounted for as a true sale by such Restricted Subsidiary,
(ii) any adjustments to the initial sale price after such
Asset Sale is consummated shall be accounted for on the cash basis,
(iii) the consideration received by such Restricted Subsidiary
in connection with such Asset Sale is not less than 75% of the
unamortized amount of
31
commissions and similar fees paid by such Restricted Subsidiary to
unaffiliated broker-dealers or others in respect of sales or other
transactions giving rise to such Designated Assets,
(iv) the terms of such Asset Sale are reasonable in light of
custom in the market for such transactions at such time, and
(v) the net cash proceeds realized upon completion of such Asset
Sale are applied by the Company within five days after the effective
date of such Asset Sale to repay Indebtedness under the Existing Bank
Credit Facility or any bank credit facility entered into in order to
refinance or replace the Existing Bank Credit Facility; and
(e) other Asset Sales for fair value, provided in each case that
(i) immediately before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, and
(ii) the aggregate book value attributable to property or assets
disposed of in such Asset Sale and all other Asset Sales by the
Company and its Restricted Subsidiaries (x) during the 12-month period
ending on the date of such Asset Sale does not exceed 10% of
Consolidated Total Assets as of the end of the then most recent fiscal
year and (y) during the period from the date of the Closing to the
date of such Asset Sale does not exceed 30% of Consolidated Total
Assets as of the end of the then most recent fiscal year,
and provided further that for purposes of clause (ii) above there shall be
excluded the book value attributable to property or assets disposed of in
an Asset Sale equal to the net cash proceeds realized upon completion of
such Asset Sale and applied by the Company or a Restricted Subsidiary
within 365 days after the effective date of such Asset Sale (x) to the
acquisition of assets, of at least equivalent value and earning power,
which are used or useful in the business of the Company and its Restricted
Subsidiaries or (y) to repay Funded Indebtedness of the Company or any
Restricted Subsidiary (and in that connection the Company shall have made
an offer to the holders of all Notes at the time outstanding to prepay, pro
rata among all Notes tendered, an aggregate principal amount of Notes at
least equal to a pro rata portion of all such Funded Indebtedness to be
prepaid, at the principal amount of such Notes, together with interest
accrued thereon to the date of such prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount,
and
32
which offer shall provide each holder with sufficient information to make
an informed decision and shall remain open for at Least 20 Business Days).
For purposes of this Section 10.5 any shares of Voting Stock of a
Subsidiary that are the subject of an Asset Sale shall be valued at the greater
of the fair market value of such shares as determined in good faith by the Board
and an amount equal to the product of (1) aggregate net book value of the assets
of such Subsidiary as of the fiscal quarter then most recently ended and (2) a
fraction of which the numerator is the aggregate number of shares of Voting
Stock of such Subsidiary disposed of in such Asset Sale and the denominator is
the aggregate number of shares of Voting Stock of such Subsidiary outstanding
immediately prior to such Asset Sale.
10.6. MERGER, CONSOLIDATION, ETC.
The Company will not and will not permit any Restricted Subsidiary to
consolidate with or merge or amalgamate with any Person or convey, transfer or
lease all or substantially all of its assets in a single transaction or series
of transactions to any Person except:
(a) a Restricted Subsidiary may consolidate with or merge or
amalgamate with, or convey or transfer all or substantially all of its
assets to the Company (provided that the Company shall be the continuing or
surviving entity) or a then existing Wholly-Owned Restricted Subsidiary;
(b) the Company may consolidate with or merge or amalgamate with, or
convey or transfer all or substantially all of its assets to a corporation
or other entity organized and existing under the laws of the United States
or any State thereof, provided that
(i) if the Company is not the continuing, surviving or acquiring
entity, the surviving corporation or other entity shall have (A)
executed and delivered to each holder of a Note its assumption in form
and substance satisfactory to the Required Holders of the due and
punctual performance and observance of all obligations of the Company
and under this Agreement, the Other Agreements, the Notes and the
Security Documents to which the Company is a party and (B) caused to
be delivered to each holder of a Note an opinion of counsel reasonably
satisfactory to the Required Holders to the effect that all agreements
or instruments effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof, and
33
(ii) immediately before and after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation or other entity that shall theretofore have become such in the
manner prescribed in this Section 10.6 from its respective liabilities under
this Agreement or the Notes.
10.7. CHANGE IN MANAGEMENT.
The Company will not permit any material change in the management of
the Company and its material Restricted Subsidiaries taken as a whole. For
purposes of the foregoing, "MATERIAL CHANGE" means a cessation of employment of
a majority of the Management Shareholders (other than those whose employment
ceases due to death, disability or retirement after age 65).
10.8. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
(a) The Company will not designate any Restricted Subsidiary as an
Unrestricted Subsidiary unless
(i) such Subsidiary was not previously (directly or indirectly) an
Unrestricted Subsidiary,
(ii) such Subsidiary does not own or hold any Indebtedness, shares
or other securities of the Company or another Restricted Subsidiary, and
(iii) immediately before and after giving pro forma effect to such
designation (including without limitation after giving pro forma effect to
such designation for purposes of Section 10.3), no Default or Event of
Default shall have occurred and be continuing.
(b) The Company will not designate any Person as a Restricted
Subsidiary unless
(i) such Subsidiary was not previously (directly or indirectly) a
Restricted Subsidiary, and
(ii) immediately before and after giving pro forma effect to such
designation (including without limitation after giving pro forma effect to
such designation for purposes of Section 10.3), no Default or Event of
Default shall have occurred and be continuing.
(c) Forthwith and in any event within ten Business Days after a
designation pursuant to clause (a) or (b) above, the Company will furnish each
holder of the Notes with a certificate of a Senior Financial Officer specifying
the effective date of
34
such designation and setting forth calculations in reasonable detail
demonstrating compliance with the conditions to such designation set forth in
clause (a) or (b), as applicable.
10.9. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any transaction or group Of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or a Fund or Wholly-Owned Restricted Subsidiary), except
in the ordinary course and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business, in each case upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) default in the payment of any principal or Make-Whole Amount, if
any, on any Note when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise; or
(b) default in the payment of any interest on any Note for more than
five Business Days after the same becomes due and payable; or
(c) default in the performance of or compliance with any term
contained in Sections 10.1 to 10.7, inclusive, and in the case of Section
10.2 such default shall have continued for a period of ten Business Days
after a Senior Financial Officer obtains knowledge thereof, or default in
the performance of or compliance with any term contained in Section 7.1(d);
or
(d) default in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 11) or in any Security Document or in the payment of
any fees due pursuant to the Intercreditor Agreement and such default is
not remedied within 30 days after a Senior Financial Officer obtains
knowledge thereof; or
(e) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary or by any officer of the Company or any
Subsidiary in this Agreement or any Security Document or in any writing
furnished in connection with the transactions contemplated hereby proves
35
to have been false, incorrect or incomplete in any material respect on the
date as of which made; or
(f) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness (other
than the Notes) beyond any period of grace provided with respect thereto,
or (ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any evidence of any
Indebtedness or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default
or condition such Indebtedness has become, or has been declared (or one or
more Persons have been entitled for at least ten Business Days to declare
such Indebtedness to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a consequence
of the occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Indebtedness to convert such
Indebtedness into equity interests), (x) the Company or any Restricted
Subsidiary has become obligated to purchase or repay any Indebtedness
before its regular maturity or before its regularly scheduled dates of
payment, or (y) one or more Persons have the right to require the Company
or any Restricted Subsidiary so to purchase or repay such Indebtedness,
provided that the aggregate outstanding principal amount of Indebtedness
(without duplication) affected by defaulted payments and other events
described in clauses (i), (ii) and (iii) above shall exceed $3,000,000; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any
Restricted Subsidiary, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part
of its property, or constituting an order for relief or approving a
36
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any Restricted Subsidiary, or any such Petition shall be
filed against the Company or any Restricted Subsidiary and such petition
shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $3,000,000 are rendered against one or more of the
Company and its Restricted Subsidiaries which judgments are not, within 30
days after entry thereof, bonded, paid, discharged or stayed pending
appeal, or are not discharged within 30 days after the expiration of such
stay; or
(j) any Security Document shall cease to be in full force and effect
as an enforceable instrument of the Company or any Grantor or Pledgor, or
any Person at its authorized direction or on its behalf shall assert that
any Security Document is unenforceable in any material respect, or the
security interests purported to be created by any Security Document shall
cease to be enforceable and of the same effect and priority as purported to
be created thereby; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section 4001(a)
(18) of ERISA) under all Plans, determined in accordance with Title IV of
ERISA, shall exceed $1,000,000, (iv) the Company or any ERISA Affiliate
shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans, (v) the Company or any
ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company
or any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and any
such event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
37
As used in Section 11 (k), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in section 3 of ERISA
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 has occurred, all the Notes then outstanding
shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Majority Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes at the time outstanding to be immediately due
and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
such holder or holders to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) (to the full extent permitted by applicable law)
the Make-Whole Amount determined in respect of such principal amount, shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided) and that the provision for payment of a
Make-Whole Amount by the Company in respect thereof in the event that the Notes
are prepaid or are accelerated as a result of an Event of Default, is intended
to provide compensation for the deprivation of such right under such
circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the
38
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the Required Holders, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, has been paid, (b) all Events of Default and Defaults, other than the non-
payment of amounts that have become due solely by reason of such declaration,
have been cured or have been waived pursuant to Section 17, and (c) no judgment
or decree has been entered for the pavement of any monies due pursuant hereto or
to such Notes. No rescission and annulment under this Section 12.3 will extend
to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15, the
Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including without
limitation reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any
39
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder's attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), within five
Business Days thereafter the Company shall execute and deliver, at its expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred except in
denominations of $500,000 or more, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be issued to such holder in a denomination of less than $500,000.
You agree that the Company shall not be required to register the
transfer of any Note to any Person (other than your nominee) or to any separate
account maintained by you unless the Company receives from the transferee a
customary representation to the Company (and appropriate information as to any
separate accounts or other matters) or other assurances reasonably satisfactory
to the Company to the effect that such transfer does not involve a prohibited
transaction (as such term is defined in section 406 (a) of ERISA and section
4975 (c) (1) (A) - (D) of the Code). You shall not be liable for any damages in
connection with any such representations or assurances provided to the Company
by any transferee.
Any transferee of a Note, by its acceptance of such Note, shall be
deemed to have represented to the Company that it is not a Competitor, unless
prior to the transfer of such Note and in lieu of such representation the
proposed transferee of such Note notifies the Company in writing that it may be
a Competitor and either agrees in writing that it will be subject to the
limitations applicable to a Competitor hereunder or requests that the Company
advise it as to whether such proposed transferee would be deemed to be a
Competitor. If a proposed transferee makes such request the Company shall,
within two
40
Business Days after being requested so to do, determine on a reasonable basis
and in good faith in consultation with such proposed transferee whether such
proposed transferee would be deemed to be a Competitor. Any holder of a Note
which is a Competitor (whether by agreement or the Company's determination as
aforesaid) shall be subject to the applicable limitations specified in Sections
7.1(h) and 7.3(a).
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for or an Affiliate of, an original Purchaser or any
other Institutional Investor with a minimum net worth of at least
$25,000,000, such Person's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
within five Business Days thereafter the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, premium, if any, and
interest becoming due and payable on the Notes shall be made at the principal
office of Citibank, N.A. in New York City. The Company may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the
Company in New York City or the principal office of a bank or trust company in
New York City.
14.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if
41
any, and interest by the method and at the address specified for such purpose
below your name in Schedule A, or by such other method or at such other address
as you shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at the place for notices most recently
designated by the Company pursuant to Section 18. Prior to any sale or other
disposition of any Note held by you or your nominee you will, at your election,
either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by you and each Other Purchaser or holder of a Note in connection with
such transactions and in connection with any amendments, waivers, consents or
other actions under or in respect of this Agreement, the Notes, the
Intercreditor Agreement or any Security Document (whether or not such amendment,
waiver or consent or other action becomes effective), including without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement, the Notes, the Intercreditor Agreement or any Security Document or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, the Notes, the Intercreditor
Agreement or any Security Document, or by reason of being a holder of any Note;
(b) the costs and expenses, including financial advisors' and accountants' fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes; and (c) the costs and
expenses incurred from time to time in connection with execution and delivery of
any instruments or documents contemplated by this Agreement, the Intercreditor
Agreement or any Security Document. The Company will pay, and will save you and
each other holder of a Note harmless from, all claims in respect of any fees,
costs or
42
expenses, if any, of brokers and finders (other than those retained by you).
In furtherance of the foregoing, on the date of the Closing the
Company will pay or cause to be paid the reasonable fees and disbursements
(including estimated unposted disbursements as of the date of the Closing) of
your special counsel which are reflected in the statements of such counsel
submitted to the Company at least one Business Day prior to the date of the
Closing. The Company will also pay, promptly upon receipt of supplemental
statements therefor, reasonable additional fees, if any, and disbursements of
such counsel in connection with the transactions hereby contemplated (including
disbursements unposted as of the date of the Closing to the extent such
disbursements exceed estimated disbursements paid as aforesaid).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument or
document delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it is used
therein), will be effective as to you unless consented to by you in writing, and
(b) no such amendment or waiver may, without the written consent of the holder
of each Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 12 relating to acceleration or rescission, change the
43
amount or time of any prepayment or payment of principal of, or change the rate
or the time of Payment or method of computation of interest or of the Make-Whole
Amount on, the Notes, (ii) change the percentage of the principal amount of the
Notes the holders of which are required to consent to any such amendment or
waiver, or (iii) amend any of Sections 8, 11 (a), 11 (b), 12, 17 or 20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the Notes
------------
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the Provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
-------
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or such security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver or- any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
44
17.4. NOTES HELD BY THE COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and, unless otherwise herein provided, sent (a) by telecopy if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other address
as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of the Vice President - Finance,
with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address as the Company
shall have specified to the holder of each Note in writing. Notices under
this Section 18 will be deemed given only when actually received (or when
the recipient rejects delivery thereof).
19. REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees
45
and stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or you or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with your normal
practices with respect to the protection of confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, trustees, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors whose duties require them to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other
46
Person to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable to you,
(x) in response to any subpoena or other legal process, (y) in connection with
any litigation to which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement, such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and you shall have
all the rights of an original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including without limitation any subsequent
holder of a Note) whether so expressed or not.
22.2. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent
47
of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
22.3. JURISDICTION AND PROCESS; WAIVER OF JURY TRIAL.
(a) The Company irrevocably submits to the non-exclusive in personam
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement, the Notes, any Subsidiary Guarantee or any
Security Document. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the in personam
jurisdiction of any such court, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
(b) The Company consents to process being served in any suit, action
or proceeding of the nature referred to in Section 22.3(a) by mailing a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the Company at its address specified in Section 18 or at such
other address of which you shall then have been notified pursuant to said
Section. The Company agrees that such service upon receipt by the Company or by
its agent as aforesaid (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid
personal service upon and personal delivery to the Company. Notices hereunder
shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service.
(c) Nothing in this Section 22.3 shall affect the right of any holder
of a Note to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d) THE COMPANY AND (BY ACCEPTANCE OF A NOTE) EACH HOLDER OF A NOTE
WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT,
THE OTHER AGREEMENTS, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION
HEREWITH OR THEREWITH.
48
22.4. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding (but without limiting the requirement in Section 8.3 that notice
of any optional prepayment specify a Business Day as the date fixed for such
prepayment), any payment of principal of or Make-Whole Amount (if any) or
interest on any Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day without including the additional days
elapsed in the computation of the interest payable on such next succeeding
Business Day.
22.5. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.
22.6. ACCOUNTING TERMS.
All accounting terms used herein which are not expressly defined in
this Agreement have the meanings respectively given to them in accordance with
GAAP. Except as otherwise specifically provided herein, all computations made
pursuant to this Agreement shall be made in accordance with GAAP and all balance
sheets and other financial statements with respect thereto shall be prepared in
accordance with GAAP. Except as otherwise specifically provided herein, any
consolidated financial statement or financial computation shall be done in
accordance with GAAP; and, if at the time that any such statement or computation
is required to be made the Company shall not have any Restricted Subsidiary,
such terms shall mean a financial statement or a financial computation, as the
case may be, with respect to the Company only.
22.7. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.8. GOVERNING LAW.
This Agreement and the Notes shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the Commonwealth of Pennsylvania excluding choice-of-law principles of the law
of such
49
Commonwealth that would require the application of the laws or a jurisdiction
other than such Commonwealth.
22.9. LIMITATION OF LIABILITY.
You and (by acceptance of a Note) each holder of a Note are expressly
put on notice of the limitation of liability as set forth in the Declaration of
Trust of the Company and the declarations of trust of certain of the Company's
Subsidiaries and agree that the obligations assumed by the Company and its
Subsidiaries pursuant to this Agreement and the Security Documents shall be
limited in any case to the Company and its Subsidiaries and their respective
assets. You and (by acceptance of a Note) each holder of a Note agree not to
seek satisfaction of any obligation of the Company or its Subsidiaries under
this Agreement from any of the shareholders of the Company, the trustees,
officers or agents of those entities, or any of them, except as contemplated
under the Pledge Agreement, the Declaration of Trust of the Company and the
declarations of trust of certain or the Company's Subsidiaries. Notwithstanding
the foregoing, nothing in such declarations of trust or elsewhere shall prohibit
any holder of a Note or the Collateral Agent on behalf of the holders of the
Notes from pursuing any remedies against any outside professionals or
consultants employed by the Company or its Subsidiaries.
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
FEDERATED INVESTORS
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
The foregoing is hereby agreed to as of the date thereof.
[The forms of signature by each of the Purchasers, as they appear on the
respective Note Purchase Agreements, are set forth below.]
THE TRAVELERS INSURANCE COMPANY
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
2nd Vice President
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA INVESTMENTS, INC.
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
on behalf of one or more separate accounts
By CIGNA INVESTMENTS, INC.
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Managing Director
ALLSTATE LIFE INSURANCE COMPANY
BY ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Representative
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Representative
ALLSTATE INSURANCE COMPANY
By ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Representative
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Representative
NORTHERN LIFE INSURANCE COMPANY
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Treasurer
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Authorized Representative
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY
By ▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Securities Department
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President
Investments
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
Private Placement Investments
SCHEDULE A
This Schedule A shows the names and addresses of the Purchasers under
the foregoing Note Purchase Agreement and the ether Agreements referred to
therein and the respective principal amounts of Notes to be purchased by each.
@@
Principal Amount
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
THE TRAVELERS INSURANCE COMPANY $25,000,000
(1) All payments on account of the Notes
shall be made by wire transfer of
federal or other immediately available
funds prior to 12:00 noon (New York
time) on the due date to The Travelers
Insurance Company -- Consolidated
Private Placement Account No. 910-2-
587434 at The Chase Manhattan Bank,
N.A., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ABA# 021-000021, with
sufficient information (including
interest rate and maturity) to
identify the source and application of
such funds including the PPN: 31420#
AB 9 of the Notes.
(2) Address for all notices in respect of
payment:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Securities Department-
Cashier
(3) Address for all other communications:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Department-
Private Placements
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(4) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY $15,000,000
(Notes registered in the name of
CIG & CO.)
(1) All payments on account of the Notes
shall be made in the form of bank
wire transfer or other immediately
available funds to: FED ABA
#02100002l Chase NYC/CTR/BNF=CIGNA
Private Placements/AC=9009001802
OBI= __________
PPN: 31420# AB 9, the amount of
interest and/or principal, the amount
of any prepayment, the payable date,
the originator's contact name and
telephone number
(2) Address for all notices in respect to
payments:
CIG & CO.
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Processing (S-206)
With a copy of such notice to:
The Chase Manhattan Bank, N.A.
Private Placement Servicing
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: CIGNA Private Placements
Fax: ▇▇▇-▇▇▇-▇▇▇▇/1005
(3) Address for all other communications:
CIG & CO.
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Securities
Division (S-307)
(4) Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
A-2
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, $10,000,000
on behalf of one or more separate
accounts
(Notes registered in the name of
CIG & CO.)
(1) All payments on account of the Notes
shall be made in the form of bank
wire transfer or other immediately
available funds to: FED ABA
#02l000021 Chase NYC/CTR/BNF=CIGNA
Private Placements/AC=9009001802
OBI= _________
PPN: 31420# AB 9, the amount of
interest and/or principal, the amount
of any prepayment, the payable date,
the originator's contact name and
telephone number
(2) Address for all notices in respect to
Payments:
CIG & CO.
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Securities Processing (S-206)
With a copy of such notice to:
The Chase Manhattan Bank, N.A.
Private Placement Servicing
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: CIGNA Private Placements
Fax: ▇▇▇-▇▇▇-▇▇▇▇/1005
(3) Address for all other communications:
CIG & CO.
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Private Securities
Division (S-307)
(4) Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
A-3
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
ALLSTATE LIFE INSURANCE COMPANY $12,500,000
(1) All payments by Fedwire transfer of
immediately available funds,
identifying the name of the Company,
the Private Placement Number
preceded by "DPP" and the payment as
principal, interest or premium, in
the format as follows:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance
Company
Collection Account #168-1l7-0
ORG = Federated Investors
OBI = DPP (31420# AB 9)
Payment Due Date (MM/DD/YY) -
P________ (Enter "P" and
amount of principal being
remitted, for example,
P5000000.00) -
I________ (Enter "I" and
amount of interest being
remitted, for example,
I225000.00)
(2) All notices of scheduled payments
and written confirmation of such
wire transfers to be sent to:
Allstate Insurance Company
Investment Operations - Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
A-4
(3) Securities to be delivered to:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Institutional Custody, 5E
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇
For Allstate Life Insurance
Company/Safekeeping Account
No. 23-91317
(4) All financial reports, compliance
certificates and all other written
communications, including notice of
prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
A-5
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
ALLSTATE INSURANCE COMPANY $7,500, 000
(1) All payments by Fedwire transfer of
immediately available funds,
identifying the name of the Company,
the Private Placement Number preceded
by "DPP" and the payment as principal,
interest or premium, in the format
as follows:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = Federated Investors
OBI = DPP (31420# AB 9)
Payment Due Date (MM/DD/YY) -
P________ (Enter "P" and
amount of principal being
remitted, for example,
P5000000.00) -
I________ (Enter "I" and
amount of interest being
remitted, for example,
1225000.00)
(2) All notices of scheduled payments
and written confirmation of such
wire transfers to be sent to:
Allstate Insurance Company
Investment Operations - Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
A-6
(3) Securities to be delivered to:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Institutional Custody, 5E
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇
For Allstate Life Insurance
Company/Safekeeping Account
No. 23-91316
(4) All financial reports, compliance
certificates and all other written
communications, including notice of
prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
A-7
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
NORTHERN LIFE INSURANCE COMPANY $6,000,000
(1) All payments on account of the Notes
shall be made by wire transfer of
federal or other immediately
available funds to:
First National Bank
N.A. /Minneapolis
▇▇▇ ▇▇▇ ▇▇▇. S.
Acct. # 1602-3237-6105
Bank ABA t ▇▇▇▇▇▇▇▇▇
Attn: Securities Accounting
Ref: Issuer (S) , Cusip, Coupon &
Maturity
(2) Address for all communications:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Private Placements
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(3) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
A-8
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY $4, 000,000
(1) All payments on account of the Notes
shall be made by wire transfer of
federal or other immediately
available funds to:
First National Bank
N.A. /Minneapolis
▇▇▇ ▇▇▇ ▇▇▇. S.
Acct. # 1102-4001-4461
Bank ABA # ▇▇▇▇▇▇▇▇▇
Attn: Securities Accounting
Ref: Issuer(s), Cusip, Coupon &
Maturity
(2) Address for all communications:
ReliaStar Investment Research, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Private Placements
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(3) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
A-9
Principal Amounts
of Notes
Name and Address of purchaser to be Purchased
----------------------------- ---------------
PROVIDENT LIFE AND ACCIDENT INSURANCE $10,000,000
COMPANY
(Notes registered in the name of the
following nominee: PEPA & CO.)
(1) All Payments on account of the Notes
shall be made by wire transfer of
immediately available funds to:
PEPA & CO.
c/o Bankers Trust Company
New York, NY
ABA No. ▇▇▇▇▇▇▇▇▇
PVT PLACEMENT PROC
No. 99 911 145
For credit to: Provident Life and
Accident Insurance Company
Custodial Account No. 99296
Ref: Federated Investors 7.96%
Senior Secured Notes due June 27,
2006
PPN# 31420# AB 9
Principal $_________, Interest $_______
(2) Address for all notices with respect to payments
and for all other communications
Provident Life and Accident Insurance
Company
Private Placements/Investment
Department
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3) Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
(PEPA & CO.)
A-10
Principal Amounts
of Notes
Name and Address of Purchaser to be Purchased
----------------------------- ---------------
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY $8,000,000
(1) All payments on account of the Notes
shall be made by wire transfer of
federal or other immediately
available funds to
ABA #▇▇▇-▇▇▇-▇▇▇ NW MPLS/TRUST
CLEARING
ACCT #▇▇-▇▇-▇▇▇
Attn: Acct #12468800
with sufficient information
(including interest rate
and maturity) to identify the
issue to which the payment
relates and the source and
application of such funds,
including the amount of principal,
interest and premium and
the PPN: 31420# AB 9 of the Notes.
(2) Address for all notices in respect
of payment:
Norwest Bank Minnesota, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
Investors Bldg., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Income Collections
(3) Address for all other communications:
Great-West Life & Annuity Insurance
Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: U.S. Private Placements
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(4) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
A-11
SCHEDULE B
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" as to any person means any other person (a) which directly
or indirectly controls, is controlled by, or is under common control with such
person, (b) which beneficially owns or holds 10% or more of any class of the
Voting Stock of such person, or (c) 10% or more of the Voting Stock (or in the
case of a person which is not a corporation, 10% or more of the equity interest)
of which is beneficially owned or held, directly or indirectly, by such person.
"CONTROL" OR "CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.
"AGENT" is defined in Section 1.2.
"BOARD" means The Board of Trustees or Board of Directors, as
appropriate, of the Company or a committee of trustees or directors lawfully
exercising the relevant powers of the Board of Trustees or Board of Directors.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City or Pittsburgh, Pennsylvania are
required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means with respect to any Person, all
outstanding obligations of such Person in respect of Capital Leases, taken at
the capitalized amount thereof accounted for as indebtedness in accordance with
GAAP.
"CLASS A SHARES" means the Class A Common Shares of the Company.
"CLASS B SHARES" means the Class B Common Shares of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means the Pledged Collateral and the UCC Collateral.
"COLLATERAL AGENT" means PNC Bank, National Association, or its
successors as collateral agent under the Intercreditor Agreement and the
Security Documents.
"COMMON SHARES" means the Class A Shares and Class B Shares.
"COMPETITOR" means, at any date, any Person which directly, or
indirectly through one or more Affiliates, is actively engaged to a material
extent in direct competition with the Company or any of its Subsidiaries in the
management of open and closed end mutual fund assets, provided that no Person
shall be deemed to be a Competitor if (a) the aggregate amount of assets so
managed (excluding assets relating to life insurance or annuity products) by
such Person and its Affiliates is less than $4 billion or (b) such Person is not
directly engaged in such management and such Person agrees with the Company not
to disclose any Confidential Information to any Affiliate of such Person which
may be engaged in such management. The determination of whether a Person is a
Competitor shall be made in accordance with Section 13.2.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED ADJUSTED NET INCOME" means for any period of
determination the sum of (a) Consolidated Net Income for such period plus (b)
all non-cash charges to net income for such period on account of revaluation of
intangible assets in accordance with GAAP.
"CONSOLIDATED CASH FLOW" means for any period of four fiscal quarters
means (a) the sum of Consolidated Net Income plus all amounts that were deducted
from gross revenues in computing Consolidated Net Income on account of
depreciation, amortization, other non-cash charges to net income (excluding any
non-cash charges which require an accrual or reserve for cash charges for any
future period), interest expense and income tax expense, minus (b) non-cash
credits to net income, in each case of the Company and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED EARNINGS AVAILABLE FOR DEBT SERVICE AND DIVIDENDS" means
for any period of determination (a) the sum of Consolidated Net Income plus all
amounts that were deducted from gross revenues in computing Consolidated Net
Income on account of depreciation, amortization, other non-cash charges to net
income (excluding any non-cash charges which require an accrual or reserve for
cash charges for any future period), minus (b) non-cash credits to net income,
in each case of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.
B-2
"CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES" for any period of
determination means the sum of (a) Consolidated Cash Flow for such period plus
(b) Consolidated Rental Expense for such period.
"CONSOLIDATED FIXED CHARGES" means, for any period of determination,
the sum (without duplication) of (a) Consolidated Interest Expense for such
period, (b) all dividends payable during such period in respect of Preferred
Stock of any Restricted Subsidiary not owned by the Company directly or
indirectly through one or more Wholly-owned Restricted Subsidiaries and (c)
Consolidated Rental Expense for such Period.
"CONSOLIDATED INDEBTEDNESS" means, at any date, all indebtedness of
the Company and its Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means for any period of determination
all interest payable in respect of the Notes and any other then outstanding
Indebtedness (including imputed interest in respect of Capitalized Lease
Obligations), determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means for any period of determination the
net income of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (1) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount
of the gains exceeds the aggregate amount of the losses from the sale,
abandonment or other disposition of assets (other than current assets),
(2) any write-up of assets, or (3) the acquisition of outstanding
securities of the Company or any Restricted Subsidiary,
(c) any amount representing any interest in the undistributed
earnings of any other Person (other than a Restricted Subsidiary),
(d) any earnings, prior to the date of acquisition, of any Person
acquired in any manner, and any earnings of any Restricted Subsidiary
acquired prior to becoming a Restricted Subsidiary,
(e) any earnings of a successor to or transferee of the assets of the
Company prior to becoming such successor or transferee,
(f) any deferred credit (or amortization of a deferred credit)
arising from the acquisition of any Person,
B-3
(g) any portion of the net income of any Restricted Subsidiary which
for any reason is unavailable for payment of dividends to the Company or to
another Restricted Subsidiary, and
(h) any extraordinary gains.
"CONSOLIDATED RENTAL EXPENSE" means for any period of determination
the aggregate amount of rental and other obligations required to be paid by the
Company and its Restricted Subsidiaries as lessee under all operating leases
(excluding any amounts required to be paid by the lessee on account of
maintenance and repairs, insurance, taxes, assessments, utilities, operating and
labor costs and similar charges), determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, at any date, all assets of the
Company and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CREDIT FACILITY BANKS" means the banks party to the Existing Bank
Credit Facility.
"DECLARATION OF TRUST" means the Restated Declaration of Trust of the
Company dated as of July 28, 1989, as the same may be supplemented or amended
from time to time.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the giving of notice or the lapse of time, or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
9.96% and (ii) 2% above the rate of interest publicly announced by Citibank,
N.A. from time to time at its principal office in New York City as its prime
rate.
"DESIGNATED ASSETS" means the right to receive deferred sales charges,
including 12b-1 fees and contingent deferred sales charges, and (to the extent
reasonably necessary to permit any securitization transaction described in
Section 10.5(d)) shareholder servicing fees related thereto, and any comparable
fees from a Fund.
"ENVIRONMENTAL LAWS" means any and all Federal, state and local, and
any and all foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
B-4
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXISTING BANK CREDIT FACILITY" means the Senior Secured Credit
Agreement dated as of January 31, 1996 among the Company, the banks party
thereto and PNC Bank, National Association, as agent, as supplemented, amended
or restated from time to time.
"FUND FEES" means 12b-1, back-end and other similar fees contractually
due the Company or any of its Restricted Subsidiaries.
"FUNDED INDEBTEDNESS" with respect to any Person means, at any time,
(a) all Indebtedness for borrowed money of such Person or which has been
incurred by such Person in connection with the acquisition of assets having a
final maturity of one or more than one year from the date of origin thereof (or
which is renewable or extendible at the option of the obligor for a period or
periods more than one year from the date of origin), including all payments in
respect thereof that are required to be made within one year from the date of
any determination of Funded Debt, whether or not included in current
liabilities, (b) all Capitalized Leases, and (c) all Guarantees of such Person
of Funded Indebtedness of others.
"FUNDS" means the mutual funds for which the Company or any Restricted
Subsidiary serves as an advisor, an administrator, a distributor, a transfer
agent, a portfolio or fund accountant, or a clearing servicer.
"GAAP" means generally accepted accounting principles from time to
time in the United States.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States or any State thereof or other political
subdivision of any thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or
B-5
which asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial
regulatory or administrative functions of, or pertaining to, any such
government (including without limitation the National Association of
Insurance Commissioners).
"GRANTORS" means the Company and certain of its Subsidiaries who are
signatories to the Security Agreement as indicated in Exhibit 1.2(a).
"GUARANTEE" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guarantee, the Indebtedness or other obligations that are the
subject of such Guarantee shall be assumed to be direct obligations of such
obligor.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law (including
without limitation
B-6
asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"INDEBTEDNESS" means as to any person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such person for or in respect of (a) borrowed money, (b) amounts
raised under or liabilities in respect of any note purchase or acceptance credit
facility, (c) reimbursement obligations under any letter of credit, currency
swap agreement, interest rate swap, cap, collar or floor agreement or other
interest rate protection device, (d) any other transaction (including forward
sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than 30 days past due), or (e) any Guarantee of
Indebtedness for borrowed money.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note
(including any Affiliate of such purchaser) and (b) any holder of a Note holding
(together with one or more of its Affiliates) more than 2% of the aggregate
principal amount of the Notes then outstanding.
"INSURANCE SUBSIDIARY" means Federated Reinsurance Limited, an Irish
corporation, and any other corporation, business trust or other entity which is
(a) organized under the laws of Ireland or any other jurisdiction acceptable to
the Majority Holders, (b) formed by the Company to engage in the Limited
insurance activities permitted by Section 8.2(p) (i) of the Existing Bank Credit
Facility, and (c) a Wholly-Owned Restricted Subsidiary (provided that if such
Insurance Subsidiary is organized under the law of a foreign jurisdiction which
requires that residents of such foreign jurisdiction maintain a certain level of
ownership interest in such Insurance Subsidiary, then not less than 98% of the
outstanding shares or other equity interests of such Insurance Subsidiary shall
be owned by one or more Wholly-Owned Restricted Subsidiaries).
"INTERCOMPANY SUBORDINATION AGREEMENT" means the Intercompany
Subordination Agreement, substantially in the form of Exhibit 1.2(d), executed
and delivered by the Company and its Subsidiaries in favor of the holders from
time to time of the Notes and the other holders of Senior Debt referred to
therein.
"INTERCREDITOR AGREEMENT" is defined in Section 1.2.
B-7
"INVESTMENT ADVISERS ACT" is defined in Section 5.17 (b).
"Investment Company Act" is defined in Section 5.17(b).
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance (including without limitation any
of the foregoing resulting from a sale or other disposition of receivables with
recourse), or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease, upon or with respect to any property or
asset of such Person (including in the case of stock, stockholder agreements,
voting trust agreements and all similar arrangements).
"MAJORITY HOLDERS" means, at any time, the holders of at least a
majority in unpaid principal amount of the Notes at the time outstanding.
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MANAGEMENT-RELATED SHAREHOLDERS" means the persons or entities
identified as such on Schedule 5.1.
"MANAGEMENT SHAREHOLDERS" means the eleven individuals identified as
such on Schedule 5.1.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties or prospects of the Company and
its Restricted Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets, properties or
prospects of the Company and its Restricted Subsidiaries taken as a whole, (b)
the ability of the Company to perform its obligations under this Agreement, the
Notes and any Security Document to which it is a party or (c) the validity or
enforceability of this Agreement, the Notes or any Security Document.
"MEMORANDUM" is defined in Section 5.3.
"NOTES" is defined in Section 1.1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
B-8
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" or "person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization,
or a government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PLEDGE AGREEMENT" means the Amended and Restated Pledge Agreement,
substantially in the form of Exhibit 1.2(b), executed and delivered by the
Pledgors to the Collateral Agent.
"PLEDGED COLLATERAL" means that portion of the Collateral which
consists of the issued and outstanding shares of capital stock, beneficial
interests or partnership interests of the Companies and related items which are
pledged under the Pledge Agreement.
"PLEDGED SHARES" means that portion Of the Pledged Collateral which
consists of all of the issued and outstanding Class A Shares.
"PLEDGED SUBSIDIARY" means a Subsidiary of the Company whose
outstanding capital stock or shares of beneficial interest or partnership
interests are pledged to the Collateral Agent under the Pledge Agreement.
"PLEDGING SUBSIDIARIES" means Federated Investors, Inc., FII Holdings,
Inc., Federated International Management, Ltd., Federated Services Company, FS
Holdings, Inc. and Federated Shareholder Services Company.
"PLEDGORS" means the Company, the Pledging Subsidiaries and the
holders of the Class A Shares.
"PREFERRED STOCK", as applied to any corporation or other Person,
means shares or other equity interests of such corporation or Person that shall
be entitled to preference or priority over any other shares or equity interests
of such corporation or Person in respect of either the payment of dividends or
the distribution of assets upon liquidation, or both.
"PRINCIPAL AND DIVIDEND PAYMENTS" means for any period of
determination the sum of (a) scheduled principal payments on all Indebtedness of
the Company and its Restricted Subsidiaries
B-9
(other than intercompany Indebtedness) plus (b) all dividend payments on the
Common Shares and Preferred Stock actually paid in cash.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, inchoate
or otherwise.
"PROXIES" has the meaning specified in the Existing Bank Credit
Facility.
"PTE" is defined in Section 6.2(a).
"REQUIRED HOLDERS" means, at any time, the holders of at least 66
2/3% in unpaid principal amount of the Notes at the time outstanding.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED PAYMENT" means
(a) the declaration of any dividend on, or the incurrence of any
liability to make any other payment or distribution in respect of, any
shares or equity interests of any class of the Company (other than one
payable solely in Common Shares),
(b) any payment or distribution on account of the purchase,
redemption or other retirement of any shares or equity interests of any
class of the Company, or of any warrant, option or other right to acquire
such shares or equity interests, and
(c) any payment or distribution on account of the principal of or
premium, if any, with respect to Indebtedness of the Company that is
subordinated to the Notes other than mandatory sinking fund or other
retirement payments required by the terms thereof.
The amount of any Restricted Payment in property shall be deemed to be the
greater of its fair value (as determined by the board of trustees of the
Company) and its net book value.
"RESTRICTED SUBSIDIARY" as of the date of this Agreement means each
Subsidiary designated as a "Restricted Subsidiary" in Schedule 5.41, and
thereafter means each Subsidiary not designated as an Unrestricted Subsidiary
pursuant to Section 10.8.
"SEC" means the Securities and Exchange Commission.
B-10
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SECURITY AGREEMENT" means the Amended and Restated Security
Agreement, substantially in the form of Exhibit 1.2(c), executed and delivered
by the Grantors to the Collateral Agent.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement, the Proxies and any other instruments, certificates, powers of
attorney or documents delivered or contemplated to be delivered thereunder or in
connection herewith, as the same may be supplemented or amended from time to
time in accordance herewith.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, vice
president of finance, principal accounting officer, treasurer or comptroller of
the Company.
"SPECIAL PURPOSE SUBSIDIARY" means any corporation, business trust or
other entity formed by the Company to engage in the limited activities permitted
by Section 8.2(p) (ii) of the Existing Bank Credit Facility and which shall be a
Wholly-Owned Restricted Subsidiary, provided that if the Special Purpose
Subsidiary is organized under the law of a foreign jurisdiction which requires
that residents of such foreign jurisdiction maintain a certain level of
ownership interest in such Special Purpose Subsidiary, then not less than 98% of
the outstanding shares or other equity interests of such Special Purpose
Subsidiary shall be owned by a Wholly-Owned Restricted Subsidiary.
"SUBSIDIARY" means, as to any Person, (a) any corporation or other
business entity 50% or more of the combined voting power of all Voting Stock of
which is owned directly or indirectly by such Person or one or more of its
Subsidiaries or (b) any partnership in which such Person is a general partner or
of which 50% or more of the partnership interests is at the time directly or
indirectly owned by such Person or one or more of its Subsidiaries, except that
no Fund shall be deemed to be a Subsidiary of the Company. Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
B-11
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"UCC Collateral" means that portion of the Collateral in which
security interests are granted under the Security Agreement.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary
"Voting Stock" means, with respect to any Person, any shares of stock
or other equity interests of any class or classes of such Person whose holders
are entitled under ordinary circumstances (irrespective of whether at the time
stock or other equity interests of any other class or classes shall have or
might have voting power by reason of the happening of any contingency) to vote
for the election of a majority of the directors, managers, trustees or member of
any other type of governing body of such Person.
"Wholly-Owned Restricted Subsidiary" means, at any time, any
Restricted Subsidiary all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
B-12
EXHIBIT 1.1
[FORM OF NOTE]
FEDERATED INVESTORS
7.96% Senior Secured Note due ▇▇▇▇
▇▇. ▇- ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
$______________ [Date]
PPN: 31420# AB 9
FEDERATED INVESTORS, a Delaware business trust (the "Company"),
for value received, hereby promises to pay to ___________________, or
registered assigns, the principal sum of ____________________ Dollars (or so
much thereof as shall not have been prepaid) on June 27, 2006, and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal balance thereof from the date of this Note at the rate of
7.96% per annum, quarterly on March 27, June 27, September 27 and December 27 in
each year until such principal sum shall have become due and payable (whether at
maturity, at a date fixed for prepayment or by declaration, acceleration or
otherwise), and to pay on demand interest (so computed) on any overdue
principal and premium, if any, and (to the extent permitted by applicable law)
on any overdue interest, at a rate per annum equal to the greater (determined on
a daily basis) of (i) 9.96% and (ii) 2% above the rate of interest publicly
announced by Citibank, N.A. from time to time at its principal office in The
City of New York as its prime or base rate. Payments of principal , premium, if
any, and interest shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts in the manner and to the address designated by the holder hereof
and, in the absence of such designation, at said principal office of Citibank,
N.A.
This Note is one of an issue of Senior Secured Notes due 2006 of the
Company issued pursuant to the several Note Purchase Agreements dated as of June
15, 1996 (the "Note Purchase Agreements"), entered into by the Company with
certain institutional investors. The holder of this Note is entitled to the
benefits of the Note Purchase Agreements and is also entitled to the benefits
and security of certain Security Documents referred to in the Note Purchase
Agreements. Pursuant to Section 13.2 of the Note Purchase Agreements, each
transferee of a Note, by its acceptance of such Note, shall be deemed to have
represented to the Company that it is not a Competitor (as such term is defined
in the Note Purchase Agreements) unless prior to the transfer of such Note such
transferee notifies the Company that it may be such a Competitor or the Company
makes a determination as to whether it is a Competitor; and if the holder of
this Note is or is determined to be a Competitor as provided
2
in said Section 13.2, such holder shall not be entitled to exercise certain
rights, or the exercise of such rights will be subject to limitations, under
Sections 7.1(h) and 7.3(a) of the Note Purchase Agreements.
This Note is subject to required prepayments by the Company on the
dates and in the amounts specified in the Note Purchase Agreements. The Company
may at its election prepay this Note, in whole or in part, and the maturity
hereof may be accelerated following an Event of Default, all as provided in the
Note Purchase Agreements, to which reference is made for the terms and
conditions of such provisions as to prepayment and acceleration, including
without limitation the payment of a make-whole premium in connection therewith.
Upon surrender of this Note for registration of transfer or exchange,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and, at the
option of the holder, registered in the name of, the transferee. The Company
and any agent of the Company may deem and treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payments of
the principal of, premium, if any, and interest hereon and for all other
purposes whatsoever, whether or not this Note is overdue, and the Company shall
not be affected by any notice to the contrary.
As provided in the Note Purchase Agreements, this Note shall be
governed by and construed in accordance with the law of the Commonwealth of
Pennsylvania.
The holder of this Note is expressly put on notice of the limitation
of liabi1ity as set forth in the Declaration of Trust of the Company and the
declarations of trust of certain of the Company's Subsidiaries and, by
acceptance of this Note, agrees that the obligations assumed by the Company and
its Subsidiaries pursuant to this Note, the Note Purchase Agreements and the
Security Documents are limited in any case to the Company and its Subsidiaries
and their respective assets. The holder of this Note agrees not to seek
satisfaction of any obligation of the Company or its Subsidiaries under this
Agreement from any of the shareholders of the Company, the trustees, officers or
agents of those entities, or any of them, except as contemplated under the
Pledge Agreement, the Declaration of Trust of the Company and the declarations
of trust of certain of the Company's Subsidiaries. Notwithstanding the
foregoing, nothing in such declarations of trust or elsewhere shall prohibit the
Collateral
3
Agent on behalf of the holders from pursuing any remedies against any outside
professionals or consultants employed by the Company or its Subsidiaries.
FEDERATED INVESTORS
By________________________________________
Title:
________________________________________________________________________________
FEDERATED INVESTORS
___________________________
SUPPLEMENTAL AGREEMENT
Dated as of October 1, 1997
amending the
Note Purchase Agreements dated AS of June 15, 1996
___________________________
7.96% Senior Secured Notes due 2006
________________________________________________________________________________
FEDERATED INVESTORS
SUPPLEMENTAL AGREEMENT
as of October 1, 1997
Re: 7.96% Senior Secured Notes due 2006
TO THE SEVERAL NOTEHOLDERS WHOSE
NAMES APPEAR IN THE ACCEPTANCE
FORM AT THE END HEREOF
Ladies and Gentlemen:
FEDERATED INVESTORS, a Delaware business trust (the "COMPANY"), hereby
agrees with you as follows:
1. Original Note Purchase Agreements and the Notes; Proposed Amendments.
Pursuant to the several Note Purchase Agreements dated as of June 15,
1996 (the "ORIGINAL NOTE PURCHASE AGREEMENTS") entered into by the Company with
the institutional investors named in Schedule A thereto, the Company issued and
sold $98,000,000 aggregate principal amount of its 7.96% Senior Secured Notes
due 2006 (the "NOTES"), of which Notes in said unpaid principal amount remain
outstanding on the date hereof. Unless the context otherwise requires,
capitalized terms used herein without definition have the respective meanings
ascribed thereto in the Original Note Purchase Agreements.
The company proposes to enter into a program in respect of the
securitization of Designated Assets. In connection therewith the Company
proposes to amend the Original Note Purchase Agreements as hereinafter set forth
(the original note purchase Agreements as so amended are sometimes called the
"Amended Note Purchase Agreements").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you as of the Effective Date
(as below defined) as follows:
A. Organization, Authorization. Etc. The Company is a business trust
--------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite power and authority to execute, deliver
and perform its obligations under this Supplemental Agreement and the Amended
Note Purchase Agreements.
2
The execution and delivery of this Supplemental Agreement and the
performance of this Supplemental Agreement and the Amended Note Purchase
Agreements have been duly authorized by all necessary corporate and, if
required, stockholder action on the part of the Company. This Supplemental
Agreement and the Amended Note Purchase Agreements are legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.
B. Compliance with Laws, Other Instruments, Etc. The execution,
--------------------------------------------
delivery and performance by the Company of this Supplementa1 Agreement and the
Amended note Purchase Agreements do not and will not (A) contravene, result in
any breach of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
company or any Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (B) conflict with
or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (C) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
C. No Default, etc. No Event of Default or Default has occurred and
---------------
is continuing, and neither the Company nor any Subsidiary is in default (whether
or not waived) in the performance or observance of any of the terms, covenants
or conditions contained in any instrument evidencing any Indebtedness and there
is no pending request by the Company (except pursuant to this Supplemental
Agreement and the Existing Bank Credit Facility in respect of the transactions
contemplated hereby) or any subsidiary for any amendment or waiver in respect of
any contemplated or possible default with respect to such Indebtedness and no
event has occurred and is continuing which, with notice or lapse of time or
both, would become such a default.
d. No Undisclosed Fees. The Company has not, directly or indirectly,
-------------------
paid or caused to be paid any consideration (as supplemental or additional
interest, a fee or otherwise) to any holder of Notes in order to induce such
holder to enter into this Supplemental Agreement or take any other action in
connection with the transactions contemplated hereby, nor has the Company agreed
to make any such payment.
3. Representation of the Noteholder.
You represent to the Company that you are the beneficial owner of
Notes in the aggregate unpaid principal
3
amount set forth below your name in the acceptance form of this Supplemental
Agreement.
4. Amendments of Original Note Purchase Agreements, Etc.
The original Note Purchase Agreements are amended pursuant to Section
17.1 thereof, as follows:
A. Section 10.3 is amended by adding the following
sentences at the end thereof:
"Without limiting the generality of the foregoing or the definition of
'Consolidated net income', no gain or income attributable to any
interest by the company or a Restricted Subsidiary in an entity
resulting from a Qualifying Asset Sale (other than cash actually
distributed) shall be included as income for any purposes under this
Agreement. In addition, for purposes of calculating the ratios set
forth in clauses (a), (b) and (c) above, the impact of nonrecourse
Indebtedness incurred in connection with, and the cash flows
(including any non-cash interest expense) related to, a Qualifying
Asset Sale Shall be excluded."
B. Clause (i) of Section 10.5(d) is amended to read as follows:
"(i) such Asset Sale is properly (in accordance with GAAP), and
is, accounted for as a true sale by such Restricted Subsidiary, or is
a Qualifying Asset Sale,"
C. Schedule B is amended by adding a new definition of "Qualifying
asset sale", to read as follows:
"'Qualifying Asset Sale' means an Asset Sale to a Special Purpose
Subsidiary (whether or not accounted for as a true sale in accordance
with GAAP) satisfying the following conditions:
(a) such Special Purpose Subsidiary is a 'bankruptcy
remote' entity with a separate legal existence that would not be
disregarded (and accordingly the assets and liabilities of such
entity would not be subject to substantive consolidation with
those of the Company and its other Restricted Subsidiaries) in a
bankruptcy proceeding involving the company or such other
Restricted Subsidiary as a debtor;
(b) in the opinion of the Company and its counsel, such
Asset Sale would be deemed to be a sale or absolute assignment in
case of a
4
bankruptcy proceeding involving the transferor restricted
subsidiary;
(c) such Asset Sale is pursuant a Master Agreement with
respect to a program entered into by the Company with Federated
Funding 1997-1, Inc., Federated Investors Management Company,
Federated Securities Corp., the Owner Trustee of the PLT Finance
Trust 1997-1, PLT Finance, L.P., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Inc.,
and Bankers Trust Company, all as described to the holders of the
Notes in reasonable detail in writing prior to the initial Asset
Sale thereunder;
(d) such Asset Sale is without recourse to the company or
any other Restricted Subsidiary (except for recourse in respect
of customary representations and warranties made to the
purchaser, none of which shift the economic risk of nonpayment
from the purchaser); and
(e) each holder of a Note shall have received a copy of the
opinion of ▇▇▇▇▇▇▇▇ & Worcester LLP, or other counsel reasonably
satisfactory to the Majority Holders, rendered to investors and
other interested parties in connection with such Asset Sale
pursuant to such Master Agreement (including without limitation
as to the matters specified in clauses (a) , (b) and (d) above)
and an Officer's Certificate as to the matters specified in
clauses (a) to (d) above."
5. Effectiveness of this Supplemental Agreement.
This Supplemental Agreement will become effective on the date (the
"EFFECTIVE DATE") on which all of the following conditions precedent shall have
been satisfied:
A. Proceedings. All proceedings taken by the Company in connection
-----------
with the transactions contemplated hereby and all documents and papers incident
thereto shall be satisfactory to you, and you and your special counsel shall
have received all such counterpart originals or certified or other copies of
such documents and papers, all in form and substance satisfactory to you, as
you or they may reasonably request in connection therewith.
B. Execution of this Supplemental Agreement. Counterparts of this
----------------------------------------
Supplemental Agreement shall have been executed and delivered by the Company and
the Required Holders.
C. Opinion of Counsel. You shall have received an opinion, dated the
------------------
Effective Date, addressed to you and otherwise
5
satisfactory in scope and substance to you, from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
Corporate Counsel for the Company, as to the due authorization, execution and
delivery by the Company of this Supplemental Agreement and covering such other
matters incident to the transactions contemplated hereby as you may reasonably
request.
D. Payment of Fees. The Company shall have paid the fees and
---------------
disbursements of your special counsel as contemplated by Section 7 of this
Supplemental Agreement.
6. Notation of Notes.
Prior to any transfer of an outstanding Note by the holder thereof,
such holder shall either make a notation on said Note to reflect the
transactions contemplated by this Supplemental Agreement and the amendment to
such Note or surrender such Note for a new Note (the text of which may make
reference to this Supplemental Agreement) in accordance with Section 13.2 of the
Amended Note Purchase Agreements.
7. Expenses.
Without limiting the generality of Section 15.1 of the Amended Note
Purchase Agreements, the Company Agrees, whether or not the transactions
contemplated hereby are consummated, to pay the reasonable fees and
disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, your special counsel, for their
services rendered in connection with such transactions and with respect to this
Supplemental Agreement and any other document delivered pursuant to this
Supplemental Agreement and reimburse you for your out-of-pocket expenses in
connection with the foregoing.
In furtherance of the foregoing, on the Effective Date the Company
will pay or cause to be paid the reasonable fees and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ which are reflected in the statement of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ delivered to the Company on or prior to the Effective Date. The
Company will also pay promptly upon receipt of supplemental statements therefor,
reasonable additional fees, if any, and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ in connection with the transactions contemplated hereby (including
disbursements unposted as of the Effective Date).
8. Ratification.
Except as amended hereby, the Original Note Purchase Agreements are in
all respects ratified and confirmed and the provisions thereof shall remain in
full force and effect.
9. Counterparts.
This Supplemental Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
6
all of which together shall constitute one and the same instrument.
10. Governing Law.
This supplemental agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If you are in agreement with the foregoing, please sign the form of
acceptance in the space below provided, whereupon this Supplemental Agreement
shall become a binding agreement between you and the Company, subject to
becoming effective as hereinabove provided.
FEDERATED INVESTORS
BY [SIGNATURE ILLEGIBLE]
--------------------------
TITLE:
ACCEPTED AND AGREED:
NOTEHOLDERS:
THE TRAVELERS INSURANCE COMPANY
By__________________________
Title:
Principal Amount of Notes Held: $25,000,000
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA INVESTMENTS, INC.
By________________________
Title:
Principal Amount of Notes Held: $15,000,000
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
By CIGNA INVESTMENTS, INC.
By________________________
Title:
7
Principal Amount of Notes Held: $10,000,000
ALLSTATE LIFE INSURANCE COMPANY
By________________________
Title:
By________________________
Title:
PRINCIPAL AMOUNT OF NOTES HELD: $12,500,000
ALLSTATE INSURANCE COMPANY
By________________________
Title:
By________________________
Title:
Principal Amount of Notes Held: $7,500,000
NORTHERN LIFE INSURANCE COMPANY
By________________________
Title:
Principal Amount OF Notes Held: $6,000,000
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By________________________
Title:
Principal Amount of Notes Held: $4,000,000
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY
By________________________
Title:
Principal Amount of Notes Held: $10,000,000
OCTOBER __, 1997
The Noteholders whose names
appear in the Acceptance Form at
the end of the Supplementa1 Agreement
as defined below
Re: Federated Investors
Ladies and Gentlemen:
I have acted as Corporate Counsel to Federated Investors, a Delaware
business trust (the "Company"), in connection with the execution and delivery of
the Supplemental Agreement dated as of October 1, 1997 amending the Note
Purchase Agreements dated as of June 15,1996 (the "Amendment"). I furnish you my
written opinion pursuant to Section 5(c) of the Amendment.
Capitalized terms used in this opinion that are not otherwise defined
herein shall have the respective meanings set forth in the Amendment and said
Note Purchase Agreements.
In connection with this opinion I have examined, or have had attorneys in
the Legal Department of the Company examine, the originals or copies of such
records, agreements and instruments of the Company, certificates of public
officials and of officers of the Company and such other documents and records,
and such matters of law, as I have deemed appropriate as a basis for the
opinions hereinafter expressed. In making such examination, I have assumed the
genuineness of all signatures, other than those of the Company, the authenticity
of all documents submitted to me as originals and the conformity to the
originals of all documents submitted to me as copies, which facts I have not
independently verified. As to various facts material to the opinions set forth
herein, I have relied without independent verification upon factual
representations made by the Company in the Amendment, upon certificates of
public officials and upon facts certified by officers of the Company.
For purposes of the opinions expressed herein, I have assumed that
each party (other than the Company) to the Amendment and to all other documents,
agreements and instruments examined by me have all requisite power and authority
and have taken all necessary action to enter into and perform all of its
obligations under the Amendment or such other documents, agreements and
instruments to which they are a party, and that each such Amendment and other
document, agreement and instrument is and will be the valid, binding and
enforceable obligation of each party thereto. I express no opinion upon the
application of any federal, state or local statute, law, rule
Noteholders
October __, 1997
Page 2
or regulation to the authority of any such other party to enter into and to
carry out its respective obligations or exercise rights or remedies under the
Amendment or such other documents, agreements and instruments.
I am a member of the Bar of the Commonwealth of Pennsylvania, and I
express no opinions herein with respect to the law of any other jurisdiction
except the federal laws of the United States, and the Business Trust Act of the
State of Delaware. As to matters governed by the laws of the State of New York,
I have assumed that such laws are the same as the laws of the Commonwealth of
Pennsylvania.
Other than as expressly addressed below, I express no opinion herein with
respect to the application of or compliance with any federal or state securities
or antitrust or unfair competition laws or regulations (including without
limitation any filing or notice requirements thereunder), and for purposes of
this opinion have assumed compliance by all parties with such laws and
regulations.
On the basis of and subject to the foregoing and the limitations,
qualifications and exceptions set forth herein, as well as my consideration of
such questions of law as, in my judgment, are necessary or appropriate to enable
me to render the opinions herein expressed, I am of the opinion, as follows:
(1) The Company is a business trust, duly organized, validly existing
and in good standing under the laws of Delaware. The Company has the lawful
power to engage in the business it presently conducts; and is duly licensed or
qualified and in good standing in each jurisdiction wherein it owns or leases
property or conducts a material amount of business.
(2) The Company has full power to enter into, execute and deliver the
Amendment and to perform its obligations under the Amendment; and all such
actions have been duly authorized by all necessary proceedings on the part of
the Company.
(3) The Amendment has been duly and validly executed and delivered by
the Company. The Amendment constitutes a legal, valid and binding obligation of
the Company and is enforceable against the Company in accordance with its terms.
(4) Neither the execution and delivery of the Amendment by the Company
nor the consummation of the transactions contemplated in the Amendment or
compliance with the terms thereof by the Company, violate the declaration of
trust, or by-laws, of the Company or violate any applicable law or result in a
default under any material agreement or instrument, to which the Company is a
party or is bound or to which it is subject or result in the creation or
enforcement of any Lien, charge or
8
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By________________________
Title:
By________________________
Title:
Principal Amount of Notes Held: $8,000,000
October __, 1997
The Noteholders whose names
appear in the Acceptance Form at
the end of the Supplemental Agreement
as defined below
Re: Federated Investors
Ladies and Gentlemen:
I have acted as Corporate Counsel to Federated Investors, a Delaware
business trust (the "Company"), in connection with the execution and delivery of
the Supplemental Agreement dated as of October 1,1997 amending the Note Purchase
Agreements dated as of June 15, 1996 (the "Amendment"). I furnish you my written
opinion pursuant to Section 5(c) of the Amendment.
Capitalized terms used in this opinion that are not otherwise defined
herein shall have the respective meanings set forth in the Amendment and said
Note Purchase Agreements.
In connection with this opinion I have examined, or have had attorneys in
the Legal Department of the Company examine, the originals or copies of such
records, agreements and instruments of the Company, certificates of public
officials and of officers of the Company and such other documents and records,
and such matters of law, as I have deemed appropriate as a basis for the
opinions hereinafter expressed. In making such examination, I have assumed the
genuineness of all signatures, other than those of the company, the authenticity
of all documents submitted to me as originals and the conformity to the
originals of all documents submitted to me as copies, which facts I have not
independently verified. As to various facts material to the opinions set forth
herein, I have relied without independent verification upon factual
representations made by the Company in the Amendment, upon certificates of
public officials and upon facts certified by officers of the Company.
For purposes of the opinions expressed herein, I have assumed that each
party (other than the Company) to the Amendment and to all other documents,
agreements and instruments examined by me have all requisite power and authority
and have taken all necessary action to enter into and perform all of its
obligations under the Amendment or such other documents, agreements and
instruments to which they are a party, and that each such Amendment and other
document, agreement and instrument is and will be the valid, binding and
enforceable obligation of each party thereto. I express no opinion upon the
application of any federal, state or local statute, law, rule
or regulation to the authority of any such other party to enter into and to
carry out its respective obligations or exercise rights or remedies under the
Amendment or such other documents, agreements and instruments.
I am a member of the bar of the Commonwealth of Pennsylvania, and I express
no opinions herein with respect to the law of any other jurisdiction except the
federal laws of the United States, and the Business Trust Act of the State of
Delaware. As to matters governed by the laws of the State of New York, I have
assumed that such laws are the same as the laws of the Commonwealth of
Pennsylvania.
Other than as expressly addressed below, I express no opinion herein
with respect to the application of or compliance with any federal or state
securities or antitrust or unfair competition laws or regulations (including
without limitation any filing or notice requirements thereunder), and for
purposes of this opinion have assumed compliance by all parties with such laws
and regulations.
On the basis of and subject to the foregoing and the Limitations,
qualifications and exceptions set forth herein, as well as my consideration of
such questions of law as, in my judgment, are necessary or appropriate to enable
me to render the opinions herein expressed, I am of the opinion, as follows:
(1) The Company is a business trust, duly organized, validly existing and
in good standing under the laws of Delaware. The company has the lawful power to
engage in the business it presently conducts; and is duly licensed or qualified
and in good standing in each jurisdiction wherein it owns or leases property or
conducts a material amount of business.
(2) The Company has full power to enter into, execute and deliver the
Amendment and to perform its obligations under the Amendment; and all such
actions have been duly authorized by all necessary proceedings on the part of
the Company.
(3) The Amendment has been duly and validly executed and delivered by the
Company. The Amendment constitutes a legal, valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms.
(4) Neither the execution and delivery of the Amendment by the Company nor
the consummation of the transactions contemplated in the amendment or compliance
with the terms thereof by the Company, violate the declaration of trust, or by-
laws, of the Company or violate any applicable law or result in a default under
any material agreement or instrument, to which the Company is a party or is
bound or to which it is subject or result in the creation or enforcement of any
Lien, charge or
Noteholders
October __, 1997
Page3
encumbrance whatsoever upon any property of the Company or any of the other
Subsidiaries or the other Pledgors (other than Liens granted under the Senior
Loan Documents.
(5) Except for Amendment No.3 to Credit Agreement between the Company and
the Credit Facility Banks, which has been obtained, no consent, approval,
exemption, order or authorization of, or registration or filing with any
Official Body or any other persons is required by any Law or, to my knowledge,
any agreement in connection with the execution and delivery of the Amendment by
the Company.
This opinion is made solely for the benefit of the Noteholders and their
successors-in-interest; and no other person shall be entitled to rely thereon.
Furthermore, I have rendered this opinion as of the date hereof, and I do not
undertake to supplement my opinion with respect to factual matters or changes in
the law which may hereafter occur. This opinion may not be assigned, quoted or
used without my specific prior written consent.
Sincerely,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Corporate Counsel
6
all of which together shall constitute one and the same instrument.
10. Governing Law.
This Supplemental Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If you are in agreement with the foregoing, please sign the form of
acceptance in the space below provided, whereupon this Supplemental Agreement
shall become a binding agreement between you and the company, subject to
becoming effective as hereinabove provided.
FEDERATED INVESTORS
By [SIGNATURE ILLEGIBLE]
-----------------------------
TITLE:
ACCEPTED AND AGREED:
NOTEHOLDERS:
THE TRAVELERS INSURANCE COMPANY
BY /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
TITLE: 2/nd/ Vice President
Principal Amount of Notes Held: $25,000,000
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA INVESTMENTS, INC.
By_________________________
TITLE:
Principal Amount of Notes Held: $15,000,000
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
BY CIGNA INVESTMENTS, INC.
By________________________
Title:
6
all of which together shall constitute one and the same instrument.
10. Governing Law.
This Supplemental Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If you are in agreement with the foregoing, please sign the form of
acceptance in the space below provided, whereupon this Supplemental Agreement
shall become a bargaining agreement between you and the Company, subject to
becoming effective as hereinabove provided.
FEDERATED INVESTORS
By_______________________
Title:
ACCEPTED AND AGREED:
NOTEHOLDERS:
THE TRAVELERS INSURANCE COMPANY
By__________________________
Title:
Principal Amount of Notes Held: $25,000,000
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA INVESTMENTS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., Managing Director
Principal Amount of Notes Held: $15,000,000
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
on behalf of one or more
separate account
By CIGNA INVESTMENTS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., Managing Director
7
Principal Amount of Notes Held: $10,000,000
ALLSTATE LIFE INSURANCE
By [SIGNATURE ILLEGIBLE]
----------------------------
Title: AUTHORIZES SIGNATORY
By [SIGNATURE ILLEGIBLE]
----------------------------
Title: AUTHORIZES SIGNATORY
Principal Amount of Notes Held: $12,500,000
ALLSTATE INSURANCE COMPANY
By [SIGNATURE ILLEGIBLE]
----------------------------
Title: AUTHORIZED SIGNATORY
By [SIGNATURE ILLEGIBLE]
----------------------------
Title: AUTHORIZED SIGNATORY
Principal Amount of Notes Held: $7,500,000
NORTHERN LIFE INSURANCE COMPANY
By_____________________________
Title:
Principal Amount of Notes Held: $6,000,000
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By_____________________________
Title:
Principal Amount of Notes Held: $4,000,000
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY
By____________________________
Title:
Principal Amount of Notes Held: $10,000,000
7
Principal Amount of Notes Held: $10,000,000
ALLSTATE LIFE INSURANCE COMPANY
By____________________________
Title:
By____________________________
Title:
Principal Amount of Notes Held: $12,500,000
ALLSTATE INSURANCE COMPANY
By____________________________
Title:
By____________________________
Title:
Principal Amount of Notes Held: $7,500,000
NORTHERN LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Treasurer
Principal Amount of Notes Held: $6,000,000
RELIASTAR LIFE INSURANCE COMPANY
f/k/a NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Representative
Principal Amount of Notes Held: $4,000,000
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY.
BY____________________________
Title
Principal Amount of Notes Held: $10,000,000
8
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: ASSISTANT VICE PRESIDENT
INVESTMENTS
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
Title: VICE PRESIDENT
INVESTMENTS
Principal Amount of Notes Held: $8,000,000
8
GREAT-WESTERN LIFE INSURANCE COMPANY
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ VICE PRESIDENT
--------------------------
Title: INVESTMENTS
▇▇▇▇ ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ VICE PRESIDENT
--------------------------
Title: INVESTMENTS
Principal Amount OF Notes Held: $8,000,000
EXHIBIT 1.2(a)
Attachments Available upon Request
LIST OF SECURITY DOCUMENTS
1. Security Agreement
2. Pledge Agreement
3. Intercompany Subordination Agreement
4. Proxies